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A DESIGN AND IMPLEMENTATION PLAN FOR A 

KEYPUNCH UNIT MANAGEMENT SYSTEM 

INCORPORATING A VARIABLE INCENTIVE WAGE 

RATE BASED ON INDIVIDUAL PRODUCTIVITY 



Lawrence Leo Dan forth 



Library 

Naval Postgraduate School 

Monterey, California 93940 



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A DESIGN AND IMPLEMENTATION PLAN FOR A 
KEYPUNCH UNIT MANAGEMENT SYSTEM 
INCORPORATING A VARIABLE INCENTIVE V7AGE 
RATE BASED ON INDIVIDUAL PRODUCTIVITY 



by 
Lawrence Leo Danforth 



Thesis Advisor 



Gerald L. Musgrave 



December 1972 



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Library 

Naval Postgraduate School 

Monterey. Cal.forr 



A Design and Implementation Plan for a Keypunch Unit 
Management System Incorporating a Variable Incentive Wage 
Rate Based on Individual Productivity 

by 



Lawrence Leo Danforth 
Lieutenant Commander, Supply Corps, United States Navy 
B.S., University of California at Berkeley, 1963 



Submitted in partial fulfillment of the 
requirements for the degree of 



MASTER OF SCIENCE IN COMPUTER SYSTEMS MANAGEMENT 



from the 



NAVAL POSTGRADUATE SCHOOL 
December 1972 



Obrary 

Naval Postgraduate School 

Monterey, California 93940 



ABSTRACT 

This thesis offers a method to reduce keypunch costs by 
increasing the marginal physical product of keypunch labor and 
machinery. The marginal physical product of labor is increased 
through: (1) job enrichment, meaningful employee counselling, 
and motivational techniques, (2) an incentive plan that 
rewards productive employees with higher wages or more leisure 
hours that is based on a Procedure Time Model which is 
mathematically predetermined, but adjusted based on actual 
production, and (3) workspace environmental improvements 
designed to prevent working conditions from inhibiting the 
motivational and technological changes. The marginal physical 
product of machinery is increased through matching workload 
requirements to various hardware configurations with detailed 
emphasis on keydisk hardware specifications and operational 
experiences. The thesis includes the procedures and computer 
programs necessary for implementation and the production 
reports and attitude questionnaires necessary to measure the 
degree to which implementation has been successful. 



TABLE OF CONTENTS 

I. INTRODUCTION 9 

II. BACKGROUND INFORMATION 15 

III. THE WORKSPACE 18 

A. COLOR AND LIGHTING 20 

B. NOISE AND MUSIC 21 

IV. THE WORKER 23 

A. THE INDIVIDUAL 23 

1. The Normal Worker 25 

2. The Marginal Worker 30. 

B. THE GROUP 32 

C. THE STRENGTH OF MONEY AS A MOTIVATOR 37 

D. AN ALTERNATIVE TO MONEY 42 

E. WHAT OTHERS HAVE DONE 44 

V. MEASURING ATTITUDES 60 

VI. THE INCENTIVE PLAN 67 

A. THE PROCEDURE TIME MODEL 67 

1. Initial Creation of the Procedure Time 

Model 7 

2. Routine Adjustment of the Procedure 

Time Model 77 

3. Sensitivity Analysis • 81 

B. THE OPERATOR IDENTIFICATION FILE 82 

C. THE SYSTEM FILE 82 

D. INPUT DATA COLLECTION 83 

1. The Batch Control Form 83 

2. The Supervisor Exception Log 87 



3. Backlog Statistics 89 

E. CALCULATING PRODUCTION EFFECTIVENESS 

AND THE INCENTIVE REWARD 90 

F. MUACS OPTION FOR NAVAL SUPPLY CENTERS 94 

VII. SELECTION OF KEYBOARD DATA ENTRY SYSTEMS 98 

A. HARDWARE REQUIREMENTS 101 

1. General Hardware Description 101 

2. Specific Hardware Requirements 102 

B. NAVY EXPERIENCES 109 

1. Naval Supply Center, Newport, Evaluation- 109 

2. Naval Supply Center, Oakland, Study 118 

3. Naval Supply Systems Command Current 
Procurement 121 

C. CIVILIAN CORPORATE EXPERIENCES 121 

1. Bonus Gift Incorporated 121 

2. Xerox Data Systems 122 

3. Columbia Broadcasting System 123 

4. Blue Cross 124 

D. CONCLUSIONS 125 

VIII. COST ANALYSIS 145 

IX. CONCLUSION 153 

APPENDIX A. SYSTEM FLOWCHART 157 

APPENDIX B. RECORD FORMATS 161 

COMPUTER PROGRAM ONE 165 

COMPUTER PROGRAM TWO 172 

COMPUTER PROGRAM THREE 181 

COMPUTER PROGRAM FOUR 203 

4 



BIBLIOGRAPHY 212 

INITIAL DISTRIBUTION LIST 216 

FORM DD 1473 217 



I. 


II. 


III. 


IV. 


V. 


VI. 


VII. 


VIII. 


IX. 


X. 


XI. 


XII. 


XIII. 


XIV. 


XV. 


XVI. 


XVII. 


XVIII. 


XIX. 


XX. 


XXI. 


XXII. 


XXIII. 



LIST OF TABLES 

PRODUCTION RANGE TABLE 50 

QUARTERLY PRODUCTION RATE MONETARY AWARD ^n 

TABLE 

KEYPUNCH OPERATOR ATTITUDE QUESTIONNAIRE 63 

KEYPUNCH SUPERVISOR ATTITUDE QUESTIONNAIRE 6 5 

TMU - TIME MEASUREMENT UNIT CONVERSION TABLE 72 

PRIMARY KEYPUNCH PROCEDURE ELEMENTS 72 

CALCULATION OF THE BASIC NUMERIC TMU FACTOR 7 8 

ADJUSTMENT OF THE PROCEDURE TIME MODEL 7 8 

PROCEDURE TIME MODEL REPORT 79 

THE BATCH CONTROL FORM 84 

EXCEPTION WORK CODES 87 

SAMPLE SUPERVISOR EXCEPTION LOG 88 

PAY CODES 88 

BACKLOG STATISTICS LOG 90 

PRODUCTION EFFECTIVENESS FORMULA 92 

INCENTIVE HOURS FORMULA 93 

PRODUCTION REPORT (INDIVIDUAL) 95 

DIMES/MUACS REPORT 97 

TYPICAL SYSTEM CONFIGURATION 127 

PROFILE OF OPERATORS ASSIGNED TO KEY EDIT 

EVALUATION 12 8 

PRODUCTION LEARNING CURVE 129 

PRODUCTIVITY OF OPERATORS PREVIOUSLY USING 

NCR-7 3 5 13 

PRODUCTION LEARNING CURVE 131 



XXIV. PRODUCTIVITY OF OPERATORS PREVIOUSLY USING 

02 9/059 132 

XXV. SYSTEM RELIABILITY 133 

XXVI. ERROR RATES - OPERATORS PREVIOUSLY USING 

NCR-7 3 5 134 

XXVII. ERROR RATES - OPERATORS PREVIOUSLY USING 

02 9/059 135 

XXVII. OPERATING COST PER KEYBOARD PER MONTH 136 

XXIX. FORMULATION OF MONTHLY OPERATING COSTS 137 

XXX. COMPARATIVE TABLE OF KEY-TO-DISK SYSTEMS 141 

XXXI. DATA ENTRY LABOR COSTS 146 

XXXII. MONTHLY EQUIPMENT COSTS 147 

XXXIII. DISTRIBUTION OF PRODUCTION EFFICIENCY 149 

XXXIV. EFFECT OF THE INCENTIVE BASE 151 



ACKNOWLEDGEMENT 

Acknowledgement is made to Commander John M. Briggs, 
Supply Corps, United States Navy, who gave me the original 
idea for this thesis and who, as the Director of Data 
Processing at the Naval Supply Center at Long Beach, gave 
me the use of his installation to formulate my initial 
hypotheses . 



I. INTRODUCTION 

If each unit of keypunch labor and machinery were more 
productive, it would then be possible to maintain the current 
level of output with fewer units of input. Fewer units of 
input, assuming wages are constant, would result in lower 
total cost. In terms of microeconomics, the additional out- 
put generated by an additional unit of input, say labor, is 
known as the marginal physical product of labor. Likewise, 
the cost of producing another unit of output is defined as 
marginal cost. If the marginal physical product of labor 
increases due to increases in productivity, the marginal 
cost is reduced since, 



Price Per Unit of Labor 
Marginal Cost = 



Marginal Physical Product of Labor 

Changes in marginal physical product of labor may be 
accompanied by an increase in the price per unit of labor 
as the worker makes a claim on the cost reduction he has 
made possible. If the increase in price per unit of labor 
is proportionately less than the increase in the marginal 
physical product of labor, some cost reduction will be 
realized. At this point the producer is faced with two 
alternatives. He can either increase output while main- 
taining the same total cost or he can produce the same 
output at a lower total cost. In this thesis the assumption 



will be that the data processing manager is faced with a 
fixed workload and will select to produce the same output 
at a lower total cost. 

The goal of this thesis is to demonstrate a method to 
lower total keypunch costs through increases in the marginal 
physical product of labor and machinery. This goal will be 
achieved through improvements in machine performance, work- 
space environmental changes (lighting, color, etc.), 
information for employee performance counselling, and an 
incentive pay plan that financially rewards productive 
employees. A premise of this thesis is that the benefits 
resulting from these changes will more than offset the cost 
of their implementation and use. The chapters that follow 
will discuss each of the above recommended changes in re- 
lation to productivity, discuss implementation where 
applicable, and, for labor and machinery, project antic- 
ipated costs. 

Chapter II contains .a discussion of the dollar magnitude 
of keypunch in relation to the overall data processing 
operation, the range in keypunch installation size, and out- 
lines the data processing organization and job tasks upon 
which this thesis is based. 

Chapter III offers a discussion of the physical environ- 
ment of the workspace. All facets of the workspace are 
treated in general as stimulus inputs to the senses of the 
keypunch operator. This combined stimulus input is discussed 
in the context of arousal theory. Additionally, the effect 

10 



of the physical workspace on the worker's motivation to 
work is discussed in the context of Herzberg's motivation- 
hygiene theory. Chapter III concludes with specific findings 
in regard to color, lighting, noise, and music. 

Chapter IV consists of a literature review of worker 
psychology and motivation. It provides a discussion of the 
worker as an individual and as a member of a work group. 
Using an excellent survey of available research by Opsahl 
and Dunnette (1966) , the strength of money as a motivator 
is discussed as a necessary prelude to implementation of an 
incentive plan. Granting time off from work as an alternative 
to a financial reward is also discussed. In conclusion, 
Chapter IV outlines what others have done to encourage in- 
creases in worker productivity. This discussion includes 
most recognized formal plans, a look at a keypunch incentive 
plan in use at the Navy's Ships Parts Control Center, 
Mechanicsburg, Pennsylvania, and a summary of a few recent 
private industry attempts to boost productivity through "job 
enrichment. " 

Chapter V contains survey questionnaires designed to 
measure supervisor and employee "attitude" or "morale" 
before and after implementation of the recommendations of 
this thesis. The results of these questionnaires will be 
offered, in addition to actual labor and machinery reductions, 
as an indication of the degree to which the goal of this 
thesis has been achieved. 



11 



Chapter VI contains the proposed incentive pay plan. The 
plan includes a definition of all terms, a discussion of the 
implementation procedures, input requirements, report formats, 
time model and employee productivity calculations, and 
information useful in employee counselling. An optional sub- 
system of the proposed incentive plan which is designed to 
provide all necessary keypunch production data input to the 
Management Utilization and Control Standards Program, or 
MUACS, is also discussed. 

Chapter VII contains a discussion of four keyboard data 
entry systems: (1) card punch and card verifier, (2) 
buffered card punch/verifier, (3) key-to-non-compatible and 
key-to-compatible computer tape, and (4) key-to-disk or 
drum. The card punch/card verifers and buffered punch/ 
verifiers are treated as minor evolutionary steps since in- 
ception of the first machines in the 1890 's. Key-to-tape 
has also been used for many years and its characteristics 
well documented. Key-to-disk or drum, however, is new and 
relatively unknown. The main purpose of Chapter VII is to 
investigate and report on the current level of knowledge 
and experience regarding key-to-disk or drum systems in 
order to provide assistance and direction in future 
selection/procurement actions. The first section of 



1 See EDP ANALYZER, Vol. 9, No. 9, September 1971 and 
DATAMATION, June 1970. 



12 



Chapter VII provides a detailed listing of general and 
specific hardware and software requirements to use in 
comparisons of different machines. The second section of 
Chapter VII reviews what actions the Navy has taken to in- 
stall, test, and use key-to-disk or drum equipment. This 
review includes a condensation of the test of Key Edit 
Hardware at the Naval Supply Center, Newport, Rhode Island. 
The last section reviews the experiences of several 
civilian firms in installing and converting to key-to-disk 
or drum hardware . 

Chapter VIII contains a discussion of the costs of the four 
different hardware configurations in comparison with their 
output potential. In addition, Chapter VIII attempts to 
project the cost of the proposed incentive plan in terms of 
the probability of an individual operator exceeding the 
average productivity level of the installation and receiving 
an incentive reward. 

Chapter IX, the conclusion, contains a summary of the 
thesis recommendations and a discussion of the Civil Service 
regulations that provide the environment in which the thesis 
will be required to function. The conclusion is followed by 
an Appendix that contains the system flowchart, record and 
file formats, and the necessary computer programs. 

Pay plans where employees receive variable wages based 
on productivity are by their very nature susceptible to 
cheating and complaints of favoritism. The data processing 



13 



manager installing this or any wage incentives system should 
consider these problems since they will most likely require 
his close attention. Additionally, data processing manage- 
ment should be wary of giving rise to employee expectations 
that exceed management's willingness to provide. Charles 
Schulz has perhaps said this best when: 




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14 



II. BACKGROUND INFORMATION 

The exact number of keypunches and verifiers in use in 
the United States is unknown, primarily because IBM does not 
disclose the number of their devices in use. Estimates 

range from a little over one-half million to one million 

2 

machines. Of the total dollar shipments of data entry 

equipment in 1969, Stender (1970) reports that 62% were key- 
punch type machines, with 46% of these being conventional 
keypunches, 14% data entry units (keyboard type), and 2% 
paper tape, a sub-species that will not be considered in 
this thesis. Concerning the size of installations, Stender 
(1970) estimates that 30,000 installations have one to five 
machines, 10 , 00 installations have six to twelve machines, 
6,500 installations have 13 to 50 machines, and 1,700 
installations have over 51 machines. A 1970 analysis of 
budget data by the Diebold Research Program estimates that 
at least 18% of direct data processing costs are due to data 
entry operations and that costs are rising at a rate of 5% 

per year. Personnel costs account for 80% to 90% of the 

3 
data entry costs. 

The keypunch operator is normally organizationally sur- 
mounted by many levels of management, each requiring 



2 EDP ANALYZER , Vol. 9, No. 9, September 1971, p. 7 
3 Ibid. 



15 



4 
information on her performance. The following is a brief 

outline of the data processing organization and job tasks 

upon which this thesis is based. Since this thesis will 

neither analyze alternative organization structures of data 

processing departments nor analyze the influence of data 

processing on the total organization's performance, no 

implication should be made that the following represents the 

optimal organization or assignment of job tasks. 

The Keypunch Operator's prime function is to operate a 
machine which creates or verifies input records for submission 
to a mechanized process. The machines may consist of card 
punching and verifying machines, standard or buffered, or 
data entry units that utilize disk, drum, or magnetic tape 
storage. 

The Keypunch Unit Supervisor directs the activities of 
the operators by preparing economic batch sizes, equitably 
distributing the workload, performing the administrative 
functions related to labor distribution, reporting employee 
non-productive time, and, most important, counselling each 
operator on her performance. The supervisor also performs 
the management analysis function at the individual job level 
to maintain the accuracy of the proposed incentive pay system. 



4 
In this thesis the keypunch operator is referred to as 

"she" since most keypunch operators are female. No intention 

is implied to restrict women to keypunching or to classify 

the work in terms of sex. 



16 



The supervisor is assisted in this effort by periodic pro- 
duction reports that will be discussed in detail in 
Chapter VI. 

The Head of the Operations Branch is concerned with 
maximizing the effectiveness of the keypunch unit in the 
production of technically accurate input records subject to 
personnel ceiling point, hardware, and budget constraints. 
The branch head monitors the productivity of the keypunch 
operation via periodic production reports, and together with 
the Keypunch Unit Supervisor, will make recommendations on 
the type of hardware and the proper personnel/machine mix 
that should be utilized by the installation. 

The Director of Data Processing is responsible for 
managing the data processing installation, maintaining 
good working relationships with the other departments of the 
command, and ensuring that achieving data processing's goals 
occurs simultaneously with achieving the command's goals. 
The Director's primary goal is to maximize the effectiveness 
of the installation subject to the budget constraints dic- 
tated by higher authority. For keypunch operations, production 
effectiveness indicators in personnel performance and hardware 
utilization as described in Chapter VI provide the necessary 
measurements . 



17 



III. THE WORKSPACE 

The keypunch operator works in a surrounding physical 
environment that provides a stimulating input to the various 
senses of touch, sight, hearing, and smell. When coupled 
with stimuli from non-physical sources such as anxiety, 
emotional strain, the resultant arousal level may create 
a stimulus overload that results in degrading job performance. 

Wallace (1971) reports that as a person's arousal or 
alertness level increases his level of performance increases, 
but by successively smaller amounts until a maximum is reached 
Beyond this point increases in arousal will cause decreases 
in performance. It is in this area that a stimulus overload 
exists . 

Broadbent (1958) has proposed a single-channel hypothesis 
as a model to describe human information processing. Halcomb, 
McFarland, and Denny (1971) discuss this in the context of 
human time-sharing in vigilance studies. If these studies 
can be extended to say that the human mind functions along 
the lines of a single-server, single-channel, real-time 
computer, the concept of an area of stimulus overload is not 
only logical, but may someday be measurable as it is 

measurable today in computers through simulation of real- 

5 
time applications and queuing formulas. 



5 for a discussion of simulation of real-time applications 
and queuing theory see Martin, J., Design of Real-Time 
Computer Systems , Prentice-Hall, 1967. 

18 



In a different approach from the effect of workspace stimuli 
on a worker's arousal level, Herzberg, Mausner, and Snyderman 
(1967) have analyzed the effect the physical workspace has 
on the worker's motivation to work. They found that when 
feelings of unhappiness where expressed, the feelings were 
associated not with the work itself but with the conditions 
surrounding the work. These conditions were interpreted by 
the worker to be unfair and disruptive, and as such created 
an unhealthy psychological work environment. Herzberg, 
Mausner, and Snyderman (1967) refer to the factors that 
create this unhealthy environment as factors of hygiene. In 
regard to the physical workspace, the presence of harmful 
factors of hygiene serves to bring about negative job atti- 
tudes, but removal of these harmful factors will only serve 
to remove the impediments to positive job attitudes, not 
cause positive job attitudes. 

The findings of Herzberg, Mausner, and Snyderman (1967) 
that the workspace environment functions only as a dis- 
satisfier is in agreement with the distractive nature of a 
stimulus overload in arousal theory. One difference between 
the two is the differentiation between the effects of good 
and bad working conditions. In arousal theory, since no 
distinction is made between good or bad working conditions, 
either could provide an overload stimulus input to the key- 
punch operator's senses that may result in a reduction in her 
performance. In motivation-hygiene theory, however, bad 

19 



working conditions reduce motivation while good working 
conditions play a neutral role. 

The approach of this thesis is that if the environment 
of the workspace is unpleasant in the eyes of the keypunch 
operator or so stimulating that it dominates her attention, 
then action should be taken to remove the factors causing 
the reduction. This removal action may not in itself foster 
a positive work attitude, but it will inhibit the negative 
effect the factors may have on the proposals of this thesis. 

The following discussion is offered to provide assistance 
in determining what actions can be taken to improve the 
physical workspace. 

A. COLOR AND LIGHTING 6 

Color can provide a strong stimulus input. Yellows and 
oranges are considered warm colors that are stimulating. 
Cool colors such as green, blue, and grey are relaxing. Pure 
colors are more distracting than subdued tones. 

In the workspace, it has been found beneficial for workers 
to have a cool expanse of wall at least twenty feet away on 
which to rest their eyes. If the climate is hot, cool walls 
make it feel cooler while ivory or buff tones give an illu- 
sion of warmth. 

Lighting should be within a forty to sixty foot-candle 
range and there are meters available to test installed 



Cutting, R. A., M.D., "Fatigue," The American Peoples 
Encyclopedia, Grolier Inc., 1963, p. 8-349. 

20 



lighting to see if this illumination is being provided. As 
important is the requirement that the light not be glaring, 
moving, or flickering. 

B. NOISE AND MUSIC 

The amount of distraction due to noise is dependent upon 
the nature of the noise and the worker's attitude towards it. 
Some people become accustomed to noises that constantly 

irritate other people. High and low frequency noises and 

7 
sudden noises above 45 decibels are particularly disturbing. 

Sound absorbing materials should be used in such situations 
to deaden the noise. Carpeting the floor will deaden most 
noises in keypunch, cut down on floor maintenance, and raise 
the appearance of the installation. If employee partici- 
pation is permitted in the selection process, carpeting can 
be useful in raising employee morale. 

Music is an unusual paradox. According to Poock and 
Wiener (1966) , rarely have so many people felt so strongly 
for any entity that does so little towards improving pro- 
ductivity. Commercial music system contractors may promise 
all the benefits normally associated with music such as im- 
proved morale, production, absentee rate, turnover rate, etc. 
However, Poock and Wiener's studies into the actual effects 
of music do not support these claims. They report that 
while most workers desire music on the job, about 10% are 



7 Ibid. , p. 8-350 



21 



annoyed by it, and in some cases music has even been 
observed to lower the quality of work. 

Surface (1951) measured the metabolic rate of subjects 
performing a steady task under various noise and music 
situations. A decrease in metabolic rate under the music 
situation would have indicated the job was easier with the 
music or that music could be used to increase productivity 
with no increase in effort expended. The results showed no 
change in metabolic rate. His conclusion was that while 
statistical studies have shown an increase in productivity 
in some factories, these production increases were not 
achieved without an increase in effort expended. 

Smith (1947) studied the effect of music on keypunch 
operators during breaks and lunch but not during work. An 
opinion poll of the operators showed 75% wanted the time 
increased, 90% felt happier on music days, and 50% felt the 
music had helped their work output. The actual results 
found no difference in number of cards punched, in the error 
rate, or in the absentee rate. 



22 



• IV. THE WORKER 

A premise of this thesis is that while the keypunch 
operator is not viewed as an extension of her machine, her 
performance in the workspace and her reaction to an in- 
centive plan can be predicted. To assist in this prediction, 
the worker will be discussed as an individual and as a member 
of a work group in the context of Atkinson's theories on 
motivation to achieve success and motivation to avoid failure. 
The strength of financial rewards to motivate employees to 
increase productivity will be discussed via the work of 
Opsahl and Dunnette. A discussion will be presented on time 
off from work as an alternative to financial reward as an 
incentive. In conclusion, a review will be offered of what 
others have done to increase employee productivity. This 
review includes formal plans, the incentive pay plan currently 
in use in the keypunch installation at the Navy's Ships Parts 
Control Center, Mechanicsburg, Pennsylvania, and a few 
examples of the approach some private industries are currently 
taking. 

A. THE INDIVIDUAL 

Contingency Management deals with behavior modification 
through controlling reinforcements and offers techniques use- 
ful to data processing management. According to Malott (1971) , 
Contingency Management first attempts to define its operation 
through five rules. The first rule is to be consistent. The 



23 



second rule is to restrict the application to a small area 
in order to permit the concentration of administrative 
efforts and to allow workers to concentrate their behavior, 
learning fewer things, but learning them to a high level of 
competence. The third rule is to establish functional be- 
havior which Malott (1971) defines as behavior that will 
continue as a result of reinforcements received from the 
worker's peer group, work relationships, etc., after the 
controls are removed. The fourth rule is to consider pre- 
requisite behavior and not attempt to establish a particular 
behavior pattern before all preliminary behavior patterns 
have been developed. The last rule is to provide immediate 
consequences for behavior where after each response, feed- 
back is provided to strengthen correct responses and weaken 
incorrect responses. 

Malott (1971) defines a contigency as the relationship 
between a behavior and its consequence. There are four 
different contigencies : 

Positive Reinforcement - a reward presented after 

the behavior is emitted, 

Negative Reinforcement - an aversive event removed 

after the behavior is 
emitted , 

Avoidance - the presentation of an aversive event is 

delayed or prevented as a 
consequence of the desired 
behavior, and 

Punishment - an aversive event is presented after the 

behavior is emitted. 



24 



Reinforcers can fall into two categories according to 
Malott (1971). Primary reinforcers are basic, unlearned 
reinforcers such as food and water. Secondary reinforcers 
are learned reinforcers such as money and social approval. 

While this thesis does utilize a questionnaire to 
evaluate employee attitudes before and after implementation, 
no cyclic, routine methods -are provided for analyzing 
employee behavior. Therefore, the following discussion is 
offered in an attempt to forecast employee reaction to the 
implementation of this thesis and assist data processing 
management in determining which of the prior contigencies and 
secondary reinforcements should be applied. The normal 
worker and the marginal worker will be treated separately 
with the acknowledgement that a large grey area exists be- 
tween these two groups where management must select the 
tools to best fit the varying conditions. 

1 . The Normal Worker 

Teevan (1969) states that the normal worker will 
approach the job with both negative and positive motivations. 
Some work to gain whatever rewards are available while others 
work only because if they didn't work, they would fail. He 
emphasizes that when considering an incentive plan it is 
important to be aware of the differences between employees 
who are basically motivated to achieve success and those who 
are basically motivated to avoid failure because: "If one 



25 



does not recognize what these latter persons are trying to 
do, their behavior sometimes makes little sense. "° 

Atkinson, as reported by King (1970) , states that 
one factor of total motivation (TM) is the motivation to 
achieve success (MS) minus the motivation to avoid failure 
(MF) . King (1970) reports that if a worker measures low in 
both these traits he most likely falls into the category of 
the marginal worker, that an operator who measures in the 
moderate zone will probably be a good average worker, and 
that an operator who measures high in either extreme can be 
a disruptive influence that will require close management 
observation. 

According to King (1970) , the worker who has a 
tendency towards a higher motivation to achieve success will 
thrive on an incentive plan, providing the worker perceives 
a balance in the plan between his concept of the benefits to 
be gained (incentive value of success) and his personal 
estimate of the chances of success (probability of success) . 
Atkinson, as reported by Wallace (1971) , states that the 
incentive value of success and the probability of success 
can take on values from zero to one and that as the balance 
between the incentive value of success (IS) and the prob- 
ability of success (PS) move away from the midrange values 
about . 5 in an IS = 1 - PS relationship, the total motivation 



g 

Teevan, R. C, Fear of Failure and General Achievement 
Behavior , Buchnell University, 1969, p. 1. 

26 



of the worker begins to decline. If the incentive value of 

success and probability of success enter the range outside 

of 0.1 to 0.9, the worker becomes totally unmotivated to 

perform. This can be seen in his conceptualized formula of 

total motivation where: 

TM = (MS - MF) (PS) (IS) 

where : 

TM = total motivation, 

MS = motivation to achieve success, 

MF = motivation to avoid failure, 

PS = perceived probability of success, 

IS = incentive value of success. 

Thus, even though there may be tremendous value in 
performing difficult tasks (high IS) , the motivation to per- 
form these tasks, even by a person motivated to achieve 
success, will be quite low because of the level of difficulty 
expressed in the probability of success (low PS). Likewise, 
such a person does not want to waste his time on easy tasks 
of little value. A conclusion that might be drawn is that 
the person who measures high in motivation to achieve success 
may be initially happy as a keypunch operator but will soon 
be eager to move on to more rewarding jobs if she perceives 
the value of success low and the probability of success 
high. An incentive plan may offer sufficient benefits in 
recognition, money, and time off to keep her on the job, 
but, most likely, this operator will push for training on 
the other data processing machines or as a supervisor, and, 
if not forth-coming from the installation, will seek 
employment elsewhere. 

27 



Teevan ' s (1969) studies indicate that the degree to 
which a person is motivated to avoid failure appears to 
depend upon how he was treated by those responsible for his 
upbringing. Studies in early parental behavior have re- 
vealed that children of parents that emphasized early 
achievement tend to score in the higher or lower ranges of 
measures of fear of failure while children of parents that 
did not emphasize early development tend to be in the mid- 
range. The major determanent in whether a person scores 
high or low in measures of fear of failure appears to be the 
approach taken by his parents in emphasizing early achievement. 

In surveys of both parents and their college-age children 
by Teevan (1969), a pattern has emerged. In cases of parents 
that reacted neutrally when the child came up to expec- 
tations but punished when he did not, the child tended to 
score high in fear of failure. Where parents reacted 
neutrally when their child did not come up to expectations 
the child tended to score low in measures of fear of 
failure. Where a combination of punishment and reward were 
utilized there was no pronounced tendency in the child. 
Additionally, parents of a lower occupational or educational 
level who stressed achievement seem to foster higher fear 
of failure tendencies. 

Teevan' s work indicates the worker who measures 
high in fear of failure should be of interest to data 
processing management because he can demonstrate characteristics 

28 



that can be violently detrimental to an incentive plan based 
on performance. Teevan found that these workers prefer 
situations which do not lead to easy comparisons between 
themselves and others, a factor to remember when thinking 
of methods to promulgate performance results. If forced 
into achievement tasks they may yield outstanding results 
because they work so hard to avoid failure, but if they do 
fail, this will be remembered and used to reinforce future 
desires to avoid such tasks. They tend to volunteer for 
tasks that are either very easy (where success is assured) 
or for tasks that are impossible (where the penalties of 
failure are slight) . Thematic apperception test stories by 
people who measured high in fear of failure displayed 

central characters that were more pawns than controllers of 

9 
their environment. Being externally oriented to the reactions 

of the group around them, such workers tend to conform to the 
standards of those whom they feel control the immediate re- 
wards of their world, regardless of whether these standards 
are culturally acceptable. The standard setters may be data 
processing management, other workers, or people external to 
the workplace. Such workers tend to be hostile towards 
authority and lack the desire or ability to be good leaders. 



9 A Thematic Apperception Test is a psychological tool 
where a subject is given a picture and asked to tell a 
story about what he sees. The psychologist then analyzes 
the story by comparing it to various lists of key words. 



29 



2 . The Marginal Worker 

Porter (1970) defines a marginal worker as an 
employee who historically demonstrates inconsistent 
attendance at the work place, has failed to meet the 
established standards of the organization and/or has failed 
to achieve an adequate level of performance. Motivating 
this type of employee can present a complex problem to 
management. 

First, Porter (1970) contends, do not assume the 
marginal worker lacks the intelligence to perform the task. 
He is likely to be very aware of people and events, and 
highly sensitive to the slightest cues concerning the impact 
of his behavior on others. His attitude upon entering the 
workspace is masked by self-protection defenses that may 
appear hostile and alienate management. This attitude is 
generated in the main by his expectation that he will not be 
treated fairly in relation to other employees and can be 
especially true if he is also a minority group member. 

Expectancy theory, as set forth by Vroom and Campbell 
and reported by Arvey and Dunnette (1970) , distinguishes 
two types of expectancy of an individual about a task - 
Expectancy I: belief about whether or not the expenditure 
of effort will result in effective performance, and Expectancy 
II: belief about whether being an effective performer will 
lead to valued rewards. The emphasis is clearly on personal 
probability estimates where the worker's beliefs regarding 

30 



whether his effort will result in effective performance has 
a motivational effect on his performance. Porter and Lawler 
(1968) support this relationship in their findings that the 
value of a reward and the perceived effort-reward probability 
combine to influence effort (and, in combination with ability 
and role perception, to influence performance) . Arvey and 
Dunnette (1970) have found that in regard to the marginal 
worker and expectancy theory, Expectancy I may be far more , 
important in influencing job performance. If true, re- 
structuring reward systems may be less useful in motivating 
this type of worker than explaining to him exactly how his 
job behavior relates to his becoming an effective performer. 
In the context of an incentive plan for the marginal 
worker, Porter (1970) states that the methods of administering 
the incentive rewards are more important and should receive 
more attention than the types of rewards. Fringe benefits, 
in his opinion, are of little importance to the marginal 
worker since they are distant in time from his current be- 
havior and they are seldom contingent upon the quantity or 
quality of performance. Profit sharing plans only induce 
employees to stay with a company, not work harder. The point 
Porter (1970) stresses is that the timeliness of the reward 
is important. An incentive plan for normal workers will not 
be sufficiently responsive for the marginal worker. Other 
rewards of a simple nature must be developed so that the 
incentive can be a reward of recognition. 



31 



Porter (1970 ) believes the incentive should be used 
with the marginal worker in a fashion approaching the operant 
conditioning technique of shaping behavior by selectively 
reinforcing already existing responses in the marginal 
worker ' s repertory by applying positive or negative re- 
inforcements as consequences of the behavior emitted. 
Shaping consists of reinforcing closer and closer approxi- 
mations of the desired behavior. The reinforcement, according 
to Porter (1970) , may be given on the basis of a schedule of 
reinforcement. A schedule of reinforcement, according to 
Reese (1966), is a statement of the contingencies on which 
reinforcement depends where the contingencies are specified 
in terms of the number of responses emitted and/or in terms 
of the passage of time. If the reinforcements used are re- 
wards of recognition, Porter (1970) warns that recognition 
from management may be accompanied by undercutting from the 
worker's peers if they feel the reward is unwarranted and 
the worker may feel insulted if he also feels such recognition 
is unwarranted. Once the shaping has been completed and the 
initial behavior pattern has been established, the normal 
incentive plan should serve as a follow-on to reinforce the 
marginal worker's efforts over time. 

B. THE GROUP 

From 1927 to 1932 a series of experiments were conducted 
at the Hawthorne Chicago Works of the Western Electric 
Company that were based on the assumption that worker 

32 



productivity and complaints could be explained in terms of 
physical working conditions. Wassenaar and Oestreich (1972) 
report that it is difficult to overestimate the compre- 
hensive nature of the Hawthorne experiments and offer as an 
example one part of the study which involved an analysis of 
86,000 comments made by interviewees on 80 topics during 
approximately 10,000 interviews. 

The experiments at Hawthorne were typical of a school of 
thought led by Frederick Taylor known as Scientific Manage- 
ment. Proponents of Scientific Management, according to 
Wallace (1971) , believed that efficiency could be increased 
through careful selection and training of the worker and 
that the worker would put forth extra effort on the job in 
order to maximize his economic gain. An opposing school of 
thought at the time delt with Classical Organization Theory. 
The Classicist believed the structure of the organization 
was most important. Centralized or decentralized, tall or 
flat, and optimal sub-unit size were the critical elements. 
Wallace (1971) reports that, like the Scientific Manager, 
the Classicists gave little attention to the worker as a 
person. 

The results of Hawthorne raised serious questions that 
could not be answered by either group. For example, Wassenaar 
and Oestreich (1972) report that three experiments were con- 
ducted to determine the effect of illumination on productivity 
Two groups were established. One group experienced no 



33 



illumination changes while the other group was subjected 
to changes in illumination varying between three and ten 
foot-candles. The results were that: "both groups showed 
a slow but steady increase in productivity. Only after the 
illumination of the experimental group was decreased to that 
of moonlight did the group's output decrease." 1 ^ Other 
experiments concluded with similar results. Clearly some 
heretofore unknown powerful factors were operating to cause 
the increases in productivity. 

Wassenaar and Oestreich (1972) conclude that the Hawthorne 
experiments taught the importance of the informal group in 
on-the-job worker performance. They state these groups form 
spontaneously, that group members frequently develop sub- 
stantial unity and cohesiveness of thought and action, and 
that the group can exert highly effective pressures to en- 
force and maintain group norms and goals. 

Studies performed since Hawthorne, as reported by 
Forward (1969) , have shown that group achievement motivation 
is not solely a function of the individual motives which 
members bring into the group situation. Rather, as Zander 
(1970) states, the group as a functioning body has its own 
achievement motives that can either supplement or contradict 
the effect of the personal motives of the members. 



■•-^Wassenaar, D. J. and Oestreich, H. H. , The Hawthorne 
Studies: A Summary and Critical Evaluation , Lansford 
Publishing Company, 1972, p. 2. 

34 



Wallace (1971) reports that because of Hawthorne, a 
new doctrine arose dealing with human relations, but that 
the Human Relations school became the other extreme - people 
without organizations. A later school dealing in human 
potentialities has since argued that the Human Relations 
school only gives the worker the impression he is important 
and what is really needed is more emphasis on meaningful 
worker participation. 

Each of the above schools of thought emphasize elements 
important to a data processing installation. Employee 
selection and development, the effect of the organization on 
the employee and the employee's effect on the organization 
are important. Group size is a factor in the extent individual 
motives can interact with and either supplement or contradict 
group motives. Wallace (1971) has found that small work 
groups have less need for dominant leadership and experience 
less attitude change as conditions change while Rothe (1960) 
has found that small groups take higher pride in success and 
produce about 6% more than large work groups regardless of 
the pay system. 

Zander (1970) has found that while individual motives 
and group motives are independent, they display identical 
characteristics. Like individuals, groups can be motivated 
to achieve success or motivated to avoid failure. The 
motivational direction of one group may be quite different 
from another even though both have members in common. 



35 



Motivation to achieve success has been observed to be more 
likely aroused in a strong group than a weak one, in a 
successful group than in a failing one, in core members 
than in peripheral members, and in groups where success is 
perceived to be the normative group response. 

There may be considerable difference from one group to 
another on whether the members emphasize their desire for 
group success or personal achievement. Studies by Zander 
(1970) have shown a tendency for more mature, more competent 
males to have interests in group achievement and for younger, 
less capable females to polarize about desires for personal 
success. Realizing this, data processing management should 
ask what can be done so that the keypunch operators can 
achieve their own goals best while directing their efforts 
towards organizational objectives. 

The extent of member desire for group success is measurable 
in group output, and in some cases, member self-regard is 
affected by the degree of group performance. In the Hawthorne 
studies, Wassenaar and Oestreich (1972) state that the 
customs and values established by the group were more important 
to individual members than working conditions or cash benefits. 
However, one factor that did show a continuous relationship 
with improved output, according to Sutermeister (1963), was 
the mental attitude of the workers. His hypothesized cause 
of this attitude change was that the workers were responding 
favorably to the increased attention they were receiving. 

36 



The effects of group motivation are important to an in- 
centive plan because if the group decides to reject the plan 
by condeming the rate busters, little will be gained. If 
small groups of equivalent competence can be formed, group 
motivation may be hightened through competition and the pub- 
lication of general group achievement levels. Whatever the 
situation, apparently it is not sufficient that most 
individuals express an interest in an incentive plan; the 
group as one body must also support the plan. 

C. THE STRENGTH OF MONEY AS A MOTIVATOR 

Opsahl and Dunnette (1966) define an incentive as: "an 
object or external condition, perceived as capable of satis- 
fying an aroused motive, that tends to elicit action to 
obtain the object or condition." 11 Financial rewards are 
commonly used as the incentive object, but they report that 
in spite of the many incentive plans that have been imple- 
mented during this century and the huge sums of money that 
have been spent, very little is known about how money inter- 
acts with the behavior of the worker. In their report they 
have listed five major hypotheses concerning the role of 
money in affecting worker on the job behavior. These hypoth- 
eses are: 



English, H. B. and English, C. A., A Comprehensive 
Dictionary of Psychological and Psychoanalytical Terms , 
McKay, 1958. 

37 



1 . Money as a Generalized Conditioned Reinforcer 
Many support the hypothesis that money acts as a 

generalized conditioned reinforcer because of its repeated 

12 

parings with various primary remforcers. Generalized 

because it applies to many reactions. Conditioned because 
it has no initial intrinsic value of its own but must be 
repeatedly associated with or paired with items of value in 
order to eventually envoke a response when present alone. 
Most of the knowledge about the strength of such reinforcers, 
Opsahl and Dunnettee (1966) conclude, has unfortunately been 
derived from studies with animals and the results involving 
money have been limited and inconclusive. 

2 . Money as a Conditioned Incentive 

If a child performs some act that pleases its mother, 
she may reward it with a cookie and thereby reduce a primary 
drive - hunger. If the child liked the cookie, the expec- 
tation of a second cookie may provide the incentive to perform 
the act again. Once this primary incentive is established, 
it may be repeatedly paired with money until money also becomes 
an incentive by conditioning. This hypothesis is very similar 
to the hypothesis of conditioned reinforcement just discussed. 
The main difference being that here money is treated as an 
object capable of affecting drive reduction. 



•^Opsahl and Dunnettee (1966) reference Holland, Skinner, 
Kelleher, Goleub. 



38 



3 . Money as an Anxiety Reducer 

When a child sees a parent experiencing a painful 
stimulus, such as the mother burning her hand on the stove, 
the child notices the emotional expression exhibited. Later 
when similar emotional expressions are displayed in pairings 
with a lack of money, the child feels anxiety related to the 
prior painful experiences. As an adult this person finds 
money to be an effective anxiety reducer. Opsahl and 
Dunnettee (1966) conclude, however, that there is no firm 
evidence to either support or disclaim this theory. 

4 . Money as a "Hygiene Factor " 

Opsahl and Dunnettee (1966) refer to Herzberg, 
Mausner and Snyderman in a hypothesis that money can only be 
used to avoid dissatisfaction ("Disease") and not to promote 
increased motivation ("Health"). Again, they state little 
evidence is available to support this hypothesis. 

5 . Money as a Tool to Gain Desired Outcomes 
Vroom has offered a hypothesis that Opsahl and 

Dunnettee (1966) support as being most likely. According to 
Vroom, money is given a value equal to its perceived ability 
to obtain other desired outcomes such as security, a new car, 
a house, etc. In an approach similar to Atkinson's total 
motivation theory, Vroom equates the probability of a worker 
making a money-seeking response to the strength of his desire 
for the outcome multiplied by his personal probability 
estimate that these responses will successfully lead to 

39 



more money. In the context of an incentive plan this 
hypothesis is the best alternative interpretation since it 
will equally support any of the previous hypotheses about 
the value of money and its role in worker on-the-job behavior. 

The basis of virtually every payment scheme is the 
equality of benefit received (payment) for benefit contributed 
(productivity) in relation to other worker/employer alter- 
natives. If this equality does not hold for the employer, 
the workforce, the employee, and the employee's social 
contacts, the relationship may be broken by either the 
worker or the employer depending on how they view the in- 
equality. For groups of workers performing a common task, 
the payment has degenerated to a common payment based on 
the contribution of the group. There is no requirement in 
such a situation for a worker to perform above average 
expectations of the employer, especially where the supply of 
workers is less than the demand for such workers at the 
current wage rate or where group pressures discourage "rate 
busters. " 

Attempts have been made to increase production by 
identifying group or individual productivity and tailoring 
payments to the observed output. Group level plans, however, 
have drawbacks similar to the straight payment system. In 
groups, especially larger groups, the worker has great 
difficulty in relating his performance to the group's contri- 
bution. The efficiency of an incentive plan is considerably 

dulled in this situation. 

40 



The effects of individual payments are complicated by 
the fact that incentive plans are not implemented in a vac- 
uum. Implementation requires a closer worker management 
relationship which alone can foster increases in productivity 
as was demonstrated in the Hawthorne study previously dis- 
cussed. Often such plans are accompanied by workspace 
environmental improvements which also cloud the effect of 
the incentive plan. This is not to say such actions are bad. 
Actions that promote increased productivity are welcomed 
providing that they can be maintained over time or, if they 
should be gradually discontinued, their absence will not 
cause an even lower level of productivity. 

Opsahl and Dunnette (1966) support Lawler ' s contention 
that if the pay plan is administered in secrecy it reduces 
money's effectiveness as a knowledge-of -results device that 
lets the employee evaluate his performance-to-reward relation- 
ship. They believe that most fears of pay disclosure stem 
from fear by salary administrators that they could not pro- 
vide convincing arguments to support their present practices 
in regard to relating job performance to salary payments. 

In publicizing the results of an incentive plan data 
processing management must effectively deal with the double 
approach-avoidance conflict, reported by Opsahl and Dunnette 
(1966) , that is presented by the respective rewards and 
punishments offered by management and the work group, without 
destroying either. The incentive plan represents a potential 



41 



reward to the individual while different publishing methods 
vary in their detrimental effect on group unity. 

The recommendation of this thesis will be to plot the 
results of measuring worker productivity on a simple graph 
in the workspace. For a small installation, shift against 
shift may be a logical grouping. For larger units, each 
shift may be broken into smaller teams. To go to the 
individual level is considered detrimental since it holds an 
individual employee up to public scrutiny and is a heavy- 
handed method of dealing with the slow or marginal employee. 

Besides, workers in small groups are well aware of the 

. . . . . . 13 

abilities of individual group members. Group pressure 

under a shift or team concept will accomplish much more with- 
out the risk of channeling group unity against data processing 
management. 

D. AN ALTERNATIVE TO MONEY 

Money has been described as a tool to gain other desired 
outcomes. One desired outcome is leisure time that is best 
described in terms of microeconomics. 



13 Hollander, E. P., "Validity of Peer Nomination in 
Predicting A Distant Performance Criterion," Journal of 
Applied Psychology , Vol. 49, No. 6, 1965, p. 434-438, 
reports that the results of peer ratings are significantly 
valid in predicting ability to perform and that friend- 
ships do not have a major intrusive effect on the validity 
of the ratings. 



42 



According to Peterson (1971) , the decision to spend time 
at leisure means to forego a certain amount of income. The 
price of an hour of leisure is the income foregone by not 
working that hour. 

The market supply of labor is described by Peterson (1971) 
as an increasing function where the amount of labor offered 
by the work force will increase as the wage rate increases. 
Specifically, at a particular wage rate the workers will 
offer a certain number of hours of labor. As the wage rate 
increases, the cost of an hour of leisure also increases and 
a substitution effect of the workers trading hours of leisure 
for hours of labor is experienced. The workers by working 
more hours at a higher wage rate now have a higher income 
which they can use to purchase additional hours of leisure. 
This income effect results in the workers partially with- 
drawing their offer of additional hours of labor. The over- 
all result of the substitution and income effects is the 
offering of additional hours of labor at the increased 
wage rate. 

The behavior of the market supply of labor is determined 
by summing the labor supply behavior demonstrated by 
individual workers as they offer various hours of labor in 
return for various wage rates. Ferguson (1972) states that 
considerably more can be said about the sum than about the 
constituent parts because the individual worker may offer 
any sequence of labor hours at various wage rates. If the 

43 



sequence is similar to the constantly increasing function 
previously described, the financial incentive offered by 
this thesis should prove attractive to that individual. If 
the wage rate increases reach a high level where the income 
effect of a bigger paycheck with which to purchase leisure 
hours dominates the substitution effect of trading leisure 
hours for labor hours for a particular worker, increases in 
the wage rate may only lead to reductions in the number of 
labor hours that individual offers. Since the point at 
which the income effect starts to dominate the substitution 
effect varies from worker to worker, the incentive plan 
proposed by this thesis will give the keypunch operator the 
option of trading incentive financial rewards for leisure 
hours. 

E. WHAT OTHERS HAVE DONE 

The remainder of this chapter concentrates on what others 
have done in attempts to increase worker productivity. The 
first part deals with a discussion of several formal in- 
centive plans, some of which were developed in the late 
1800 's. The second part presents a discussion of the key- 
punch incentive plan at the Navy's Ships Parts Control Center 
The third and final part reports on the direction several 
private firms have taken to increase productivity through 
"job enrichment." 

Niebel (1958) divides what he calls direct wage financial 
plans into two classifications. One is where the worker 

44 



receives direct payment in relation to a set standard of 
performance and the other is where the cost savings due to 
performance above this standard are shared by the worker 
and his employer. Under the first classification he discusses 
five plans, the first four of which have no guaranteed 
minimum income. 

The first plan, straight piecework, is where all standards 
of performance are given in terms of dollars per unit pro- 
duced. The worker receives no base salary and is only paid 
on the basis of his exact unit production. This method was 
used more than any other plan prior to World War II because 
of its simplicity, but the method was discontinued because 
rapidly changing base pay rates since World War II created 
an untenable clerical burden in updating the standards. 

The standard hour plan is the second plan and is very 
similar to straight piecework just discussed. The difference 
is that in the standard hour plan, standards of performance 
are stated in terms of units of output per unit time. The 
immediate advantage over straight piecework is the elimi- 
nation of the clerical update effort because the standards 
do not change when base pay rates change. The immediate 
disadvantage is that it is more difficult for the worker to 
evaluate his performance. 

Taylor Differential Piece Rate, the third plan, used two 
different straight piecework rates. A low piecework rate 
was applied until a standard performance output level was 
reached, beyond this point a much higher piecework rate 

45 



was used. This method is not popular today because it 
penalizes the average and slower worker and, due to its 
use of very high standards, only rewards the few exceptional 
workers. 

Due to severe employee criticism of the Taylor Differ- 
ential Piece Rate plan, the Merrick Multiple Piece Rate plan 
was introduced. This plan established three piecework rates. 
One rate for beginners, one for average workers, and one for 
superior workers. Because it was based on piecework rates 
and because of the unpopularity of the Taylor plan, the 
Merrick plan did not meet with success. 

Measured daywork is the fifth plan and was established 
as a result of organized labor's effort to end piecework 
rates. Under measured daywork a worker established a base 
wage rate over three months of observation. He is then 
paid at this rate for the next three months regardless of 
his production, but his production will determine the base 
wage rate that will be applicable for the next three months. 
Measured daywork was not a success because of the time 
separation of performance and the reward, the detrimental 
effect of three months at a low rate, and the amount of 
clerical work required to maintain detailed records on 
each employee's wage and production rate. 

Niebel (1958) concentrates on four additional formal 
plans in a discussion of the type of plan where the employee 
is guaranteed a minimum income and shares with his employer 

46 



all cost savings created by performance above standard. 
These plans were primarily established to protect employers 
from runaway piecework rates that were erroneously estab- 
lished due to the absence of accurate time study techniques. 

The first plan, known as the Halsey Plan, was estab- 
lished in 1890. It set performance standards in units of 
output per unit time. Workers that produced above standard 
split the resultant cost savings 50/50 with the employer. 

The Bedaux Point System was established in 1916 and 
was more complex than the Halsey Plan. Basically, the Bedaux 
Point system's design is such that each job is qualified by 
the number of "B's" required to complete the job. Each "B" 
is equal to one minute of time that is composed of pre- 
determined proportions of work and rest depending upon the 
difficulty of the job. The average worker had to complete 
60 "B's" each hour. If the worker performed over standard, 
he was paid his base salary plus an amount equal to the 
number of excess "B's" earned multiplied by his wage rate 
per minute multiplied by seventy-five percent. 

The Rowan Plan introduced in 1898 set a standard time 
for each job. The incentive was calculated on the basis 
of the ratio of time saved to this standard time. Since no 
worker can save more than the time allowed, an effective 
ceiling is placed on the amount of incentive that can be 
earned. 



47 



The Emerson Plan is similar to the Rowan Plan except 
that a small incentive is provided when a worker produces in 
the 66 2/3% to 100% range of standard and a straight 20% for 
all production above 100% of standard. 

The major objection to each of these four plans, 
according to Niebel (1958), was that unlike the piecework 
rates which were growing in popularity during this time, they 
were not directly related to production and they required 
involved calculations. This thesis does not consider either 
of these objections important. Piecework rates are no 
longer popular and the power of the computer will be routinely 
utilized for all calculations. 

Caro (1971) outlines various incentive plans in use in 
the Navy. These plans include beneficial suggestion rewards, 
one time meritorious performance awards, and meritorious pay 
step increases. According to Caro (1971), they presuppose 
the presence of satisfactory working conditions, adequate 
supervision, and fair pay for a day's work. In regard to 
what has been stated in this thesis, the largest drawback 
of Navy incentive plans is the untenable delay between 
performance and reward that renders them impractical for 
daily production. 

In the later part of 1969 the Central Data Processing 
Division of the Navy's Ships Parts Control Center at 
Mechanicsburg, Pennsylvania, instituted an incentive awards 
program for keypunch unit personnel. The program consists of 

48 



establishing production standards for each job for keypunch 
and verification operations. Each operator's performance is 
matched against the standard and quarterly bonuses are 
awarded on the basis of productivity ranges above standard. 

The standards are established based on two main categories, 
The first is the quality of the source document. The elements 
of evaluation are: (1) legibility, (2) continuity of fields, 
(3) procedure complexity, (4) number of different trans- 
actions, (5) color contrast, and (6) size of the document. 
From these elements a composite rating of excellent, good, 
fair, or poor is established. The second category is the 
number of card columns punched and duplicated. For each 
of the four ratings there is a separate Production Range 
Table as shown in Table I for punching and verifying, for a 
total of eight tables. The tables are matricies of acceptable 
production ranges in cards per hour. The ordinates of the 
matrices are the number of card colunms duplicated and the 
number of card columns punched. As an example, the acceptable 
production range for punching an excellent rated job con- 
sisting of 45 columns of punching and 17 columns of dupli- 
cation is from a low of 197 cards per hour to a high of 225 
cards per hour. 

Upon receipt of job batches the keypunch supervisor 
reviews the input documents and separates them into workable 
batches if necessary. The supervisor records the start and 
stop production time and the operator's number. The elapsed 



49 



TABLE I 



PRODUCTION RANGE TABLE 



Type of Operation: 

Source Document Classification: 



Punch 
Excellent 



CCS DUPLICATED 





0-7 


8-15 


16-23 


24-31 


32 7 39 


40-47 


48-55 


56-63 


54-71 


72-79 


1-8 


840 
552 


777 
524 


724 
499 


677 
477 


636 
456 


600 

437 


567 
419 


538 
403 


511 
388 


487 
386 


9-16 
Q 

w 


554 
412 


526 
397 


501 
382 


478 
369 


457 
356 


438 
344 


421 
334 


404 
323 


389 

322 




Z 17-24 
D 

Pm 


413 
329 


398 
319 


383 
309 


370 
301 


357 
292 


345 
284 


334 
277 


324 

27 6 






- 25-32 
u 

u 


330 
274 


320 
267 


310 
260 


301 
254 


293 
248 


285 
242 


277 
241 






33-40 


274 
234 


267 
229 


260 
224 


254 
219 


248 
215 


242 

214 






41-48 


235 

205 


229 
201 


225 

197 


20 
193 


215 
193 






49-56 


205 
182 


201 
179 


197 
176 


194 

175 




CARDS PER HOUR 


57-64 


182 
164 


179 
162 


176 
161 






65-72 


164 
149 


161 
148 






73-80 


149 
138 





















50 



time includes all time expended except for lunch since a 
15% personal time allowance has been built into the Pro- 
duction Range Table. Periodically the production statistics 
are processed to determine an individual production rating 
for each employee by comparing the actual number of cards 
processed to the production range. If the actual number 
of cards processed is within the range, the rate is 100%. 
If the actual number is below the lower boundry, the lower 
boundry is divided into the actual number of cards processed 
and the quotient represents the production rating. If the 
actual number is above the higher boundry, the higher boundry 
is divided into the actual number of cards processed and the 
quotient represents the production rating. Using the 
prior example, if 150 cards had been punched, the production 
rating would be 150 divided by 197 or 76%. If 200 had been 
punched, the rating would be 100%. If 250 had been punched, 
the rating would be 250 divided by 225 or 111%. The pro- 
duction rating is tempered by the number of errors made by 
an operator. An error rate of 2% to 3% reduces the rate by 
3%, an error rate of 4% to 6% reduces the rate by 10%, and 
so on. 

To qualify for an incentive award an operator must work 
a minimum of 350 hours of measured production during the 
quarter, have an error rate of 3% or less, and be satisfactory 
in all phases of performance and conduct. The award table 
shown in Table II is used with the qualification that: "the 

51 



TABLE II 



QUARTERLY PRODUCTION RATE MONETARY AWARD TABLE 



QUARTERLY QUARTERLY 

PRODUCTION RATE MONETARY AWARD 



115-124% $25 

125-134% $35 

135-144% $45 

145-154% $55 

155-164% $65 

165-174% $75 

175-184% $90 

185-up $100 



52 



incentive awards plan was designed so that approximately 
25% of the operators would qualify for awards each quarter. 

Should the number of operators qualified for an award 

14 

exceed the 25% goal, we are obligated to adjust the table." 

There are two major limitations in this plan. First, 
using Atkinson's theory of motivation, both the incentive 
value of the award and the probability of success are low, 
thus resulting in low motivation for many employees to 
really work hard at playing the game. The second limitation 
is the time isolation of the reward from the labor that 
earned the reward. In the opinion of this thesis, three 
months is too long, one month is too long, even one hour 
is too long. The ideal would be for the data entry machine 
to display a productivity index upon completion of the 
last punch. This may seem impossible, but with the intro- 
duction today of the on-line mini-computer for controlling 
key-to-disk data entry systems, the potential is there; all 
that is needed is the software. 

There is a trend in private industry towards "humanizing" 
monotonous jobs by providing increased "job enrichment" 

through eliciting employee participation in work decisions 

1 5 
previously dictated by management. 



Navy Ships Parts Control Center, Central Data Processing 
Division, Standards and Procedures Manual , "EAM Standards and 
Procedures," Section 10, Chapter 1, Subject 2, p. 2. 

X ^ U. S. News & World Report , "The Drive to Make Dull Jobs 
Interesting," July 17, 1972, p. 50. 

53 



According to Myers (1970) , meaning is given or returned 
to work through a process known as job enrichment or job 
enlargement. He states that job enrichment may result from 
horizontal and/or vertical job enlargement. He defines 
horizontal job enlargement as an increase in the variety 
of functions performed at a given organizational level 
with the intention of first relieving boredom and then 
broadening the worker's perspective in order to pave the way 
for vertical job enlargement. Vertical job enlargement 
enables workers to participate in planning and control 
functions that had been previously reserved for super- 
visory and management personnel. 

In implementing job enrichment procedures, organizations 
are becoming flatter with authority and responsibility being 
shifted downward in response to the increasing education 

■I c 

level and changing values in the society. According to 
Secretary of Commerce Peter G. Peterson, the young worker: 
"has different expectations and attitudes than workers in 
the present generation. Business must take account of that, 
look into the work environment it is providing. It must 
consider sharing profits, joining with the workers in a 

mutual commitment to boost production instead of squaring 

17 

off and fighting." Gary B. Bryner, 29, President of 



16 Ibid. 
17 Ibid. 



54 



United Auto Workers Local 1112, has said: "the attitude of 
young people is going to compel management to make jobs more 
desirable in the workplace and to fulfill the needs of man... 
the attitude that a guy goes to work and slaves to get his 
$4 an hour is passe. The guys want to feel like they're 
making real contributions. They don't want to feel like a 

I o 

part of the machines." Bryner backed up these statements 
by striking General Motor's new showcase plant at Lordstown, 
Ohio, for one month on the basis that the jobs were too dull 
and the pressure too intense. 

Some industries are trying to capitalize on the known 
satisfaction derived from completing a task from start to 
finish. Many production assembly lines have been abolished 
for one worker assembling and testing the complete product 
as evidenced by the following examples offered by U.S. News 
& World Report . 19 

The hot-plate division of Corning Glass Works at Medfield, 
Massachusetts, abandoned the assembly line in 1965-66. Now 
each worker assembles and tests each hot-plate. Together the 
employees schedule their work to meet a weekly objective, 
suggest refinements and improvements, and devise their indi- 
vidual techniques. The operator's pride is solicited and 
accountability for quality is assured by requiring his initials 



"•" Business Week , "Job Monotony Becomes Critical," 
September 9, 1972, p. 108. 

19 U. S. News & World Report , p. 50-54. 

55 



on the final product. The results have well justified the 
approach. Rejects have fallen from 26% to 1%; absenteeism 
from 8% to 1%. As a result, this approach has spread through- 
out the plant and a team approach has been implemented in com- 
plex tasks. 

At Donelly Mirrors, Inc., of Holland, Michigan, all 
workers are on a production related incentive plan with a 
team approach organization headed by a foreman. The foreman 
can grant a day off to any worker for any reason. The workers 
decide how much of an annual salary increase they receive and 
then must find ways to pay for it. Salaries have increased 
25.5% in the past three years and they have been paid for in 
higher production, reduced costs, and elimination of unnec- 
essary jobs. 

In company after company the results of employee recog- 
nition can be seen. Monsanto textiles is using a classroom 
approach to get the worker: "to realize that he is not an 

extension of a machine, and to draw on his abilities to think, 

20 

plan, and innovate for the good of all." 

General Electric at Columbia, Maryland, has emphasized 
recognition and participation: "Each employee is the super- 
visor's responsibility, he gives them recognition, rewards 

21 

them, counsels them, and coaches them." Rap sessions, 



20 Ibid . , p. 52. 
21 Ibid. , p. 53 



56 



freedom in dress, and a strong equal opportunity program 
contribute towards their success. 

Gains Pet-Food Plant in Topeka, Kansas, has taken a 
rotating team approach to processing, shipping, and office 
duties. There is one door for all to enter and leave, one 
lunchroom, and no reserved parking places. 

At the Oak Brook, Illinois, plant of McDonald's Corpo- 
ration, worker's wear casual clothes on Friday and leave work 
at noon. Time is made up by coming to work a half -hour early 
each day. The only segregated areas with doors are the rest 
rooms . 

What has happened is that these companies have come to 
realize that the employee is their most valuable asset. Harry 
Heltzer, Chairman and Chief Executive Officer of Minnesota 
Mining and Manufacturing Company, has stated that, "Too many 
managers have the idea that the way to get better productivity 

is to stand over the worker with a club and make him push 

22 

the wheelbarrow faster." According to Dr. Michael Beer, 

Manager of Organizational Research and Development at Corning 
Glass Works, "This is an effort to deal with the changing 
needs of the work force. We have to manage to fit those 
needs, adapt to change in fast-changing industries. In the 
past, we have vastly underestimated what a person is capable of 



22 

Business Week , "Management Itself Holds the Key," 

September 9, 1972, p. 14 3. 



57 



Now we give them an opportunity to grow into the job. Not 
all employees can do it, but I think a large percentage can. 

I think this concept will snowball. It may be an answer to 

23 

the whole question of productivity." 

Myers (1970) warns against slavish emulation of any one 
particular firm's approach to job enrichment and urges develop- 
ment of job enrichment procedures particularly adapted to the 
installation in question. Several elements of this thesis 
are intended to provide the beginning steps towards job 
enlargement in keypunch. The Procedure Time Model, which is 
the foundation of the proposed incentive plan, is adjusted 
over time on the basis of observed performance in an attempt 
to allow the keypunch operator to set her own standards and 
goals. The easy recording and exclusion of training time 
from the incentive work period will facilitate data processing 
management's offering the keypunch operator a continuous 
opportunity to learn on the job. Through the use of negative 
reinforcements the proposed incentive plan encourages quality 
workmanship. The report output includes a detailed operator 
technical performance evaluation that is intended to be used 
by the unit supervisor in individual counselling of the 
operator on all aspects of her performance. The counselling 
should emphasize the relationships between the goals of the 
operator and those of the installation. These procedures 



23 U. S. News & World Report, p. 54. 



58 



are beginning steps; each installation must review its own 
operation. One approach suggested by Myers (1970) is to 
form a task force composed of a vertical cross section of the 
firm. For data processing such a cross section would start 
with the Keypunch Unit Supervisor and continue through the 
Director. The task force should study the various methods 
available as suggested by Myers (1970) and situational 
descriptions, then, on a continuing basis, analyze, plan, 
develop, and implement procedures that will enable the 
installation to benefit from the potential of the individual 
operator. 



59 



V. MEASURING ATTITUDES 

Changes in employee attitude towards the job will be 
measured using a questionnaire survey technique and the re- 
sults analyzed to determine the effect of the various job 
enrichment and motivational procedures recommended in Chapter 
IV. Measuring worker attitudes is important because pro- 
ductivity increases should not rely solely on economic 
incentives and machinery improvements. "Other motives, such 
as ego, security, curiosity, and creativity are employed to 
enhance productivity through favorable attitudes." 

According to Massee (1971) , management must be able to 
see the relationship between its behavior and the results of 
the survey questionnaire. If the results are unfavorable, 
management must resist the natural urge to reject the findings 
and, instead, implement corrective procedures. If management 
chooses to reject unfavorable findings as being untrue, Masse 
(1971) states the resultant conflict between superiors' and 
subordinates' evaluations of role performance and effectiveness 
will inhibit individuals from freely communicating important 
job matters with their superiors. 

Porter and Lawler (1968) state that: "Attitudes tradi- 
tionally have been studied by psychologists because they can 



24 Masse, S., "The Questionnaire Survey Technique," The 
Journal of Navy Civilian Manpower Management , Vol. V, No. 3, 
Fall 1971, p. 10. 



60 



provide important insights into human cognitive processes, 

and, ultimately, because they can contribute to the under- 

25 
standing and prediction of human behavior." Much of what 

is being recommended by this thesis deals with behavior 
modification. The results can be partially determined in 
terms of increased productivity as measured in record output 
per unit time, but since the recommended hardware changes 
alone are expected to increase productivity, some measure 
should be used to distinguish between productivity increases 
due to hardware and productivity increases due to behavior 
modification . 

Two survey questionnaires are included in this thesis. 
The questionnaire in Table III is to be administered to the 
keypunch operator and the questionnaire in Table IV is to be 
administered to the shift supervisors and the unit supervisor. 
The questionnaires are to be administered prior to any indi- 
cation that the ideas in this thesis are to be implemented. 
The questionnaires should be administered a second time after 
the recommendations have been implemented and the installation 
has become accustomed to the system and the benefits of 
employee counselling. The results of the two surveys should 
then be analyzed to determine what changes have occurred 
and what future modifications in managerial policies may be 
required. If the task force concept suggested by Myers (1970) 



25 Porter, L. W. and Lawler, E. E., Ill, Managerial 
Attitudes and Performance , Irwin-Dorsey Limited, 1968, p. 2 

61 



that was discussed in Chapter IV is utilized, the installa- 
tion may choose to administer this type of questionnaire at 
infrequent intervals of time in order to provide the con- 
tinuous feedback of information needed to further develop 
the process. 



62 



TABLE III 



KEYPUNCH OPERATOR 



AGREE 



DISAGREE 



1. 
2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 
10. 
11. 
12. 
13. 
14. 



Management is doing its best to give 
us good working conditions 

My boss is too interested in his own 
success to care about the needs of 
employees 

My boss gives us credit and praise 
for work well done 



Management here does everything it 
can to see that employees get a 
fair break on the job 



My boss sees that we have the 
things we need to do our jobs 



My boss sees that employees are 
properly trained for their jobs.... 

Sometimes I feel that my job counts 
for very little in this organization 

They expect too much work from us 
around here 



I'm paid fairly compared with other 
employees 

The people I work with get along 
well together 



I have confidence in the fairness and 
honesty of management 

My boss lets us know exactly what is 
expected of us 

The people who get promotions around 
here usually deserve them 

My boss has the work well organized 



63 



15. How often during the past year has your boss 
discussed his evaluation of your work performance 
with you? 

8-12 times or more ( ) 

5-7 times ( ) 

3 times ( ) 

2 times ( ) 

1 time . . . . ( ) 

No time ( ) 

16. How satisfied are you with your boss's discussions 
with you about your work performance? 

More discussion than I desire.. ( ) 

Discussion was about right. . . . ( ) 

More discussion is needed ( ) 

Much more discussion is needed ( ) 

17. Do you know what your boss wants you to get done 
during the coming year? 

Yes; we have discussed it ( ) 

I have a pretty good idea ( ) 

I 'm not sure ( ) 

I have no idea as to his 

expectations ( ) 

18. How aware is your boss of the job you have to do 
and how well are you doing it? 

He pretty well knows what is 

going on ( ) 

Most of the time he is well 

aware ( ) 

Sometimes he is aware ( ) 

Rarely is he aware ( ) 

• When he does give it attention, 
he doesn't understand what's 
going on ( ) 

19. Is your boss objective in evaluating those he supervises? 

He sees things the way they are ( ) 

Most of the time he is ( ) 

Many times he is fooled by his 
people ( ) 

It is easy for his people to cover 

up their poor performance ( ) 

He doesn't evaluate, or he goes 
by personality rather than work 
performance ( ) 



64 



TABLE IV 



SUPERVISOR 



AGREE 



DISAGREE 



1. 
2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 
10. 
11. 
12. 
13. 



Management is doing its best to give 
us good working conditions 

My boss is too interested in bis own 
success to care about the needs of 
employees 

My boss gives us credit and praise 
for work well done 



Management here does everything it 
can to see that employees get a fair 
break on the job 

My boss sees that we have the things 
we need to do our jobs 

My boss sees that employees are 
properly trained for their jobs.... 

Sometimes I feel that my job counts 
for very little in this organization 

They expect too much work from us 
around here 



I'm paid fairly compared with other 
employees 

The people I work with get along 
well together 



I have confidence in the fairness 
and honesty of management 



My boss lets us know exactly what is 
expected of us 

The people who get promotions around 
here usually deserve them 



14. My boss has the work well organized 



65 



15. How often during the past year has your boss 
discussed his evaluation of your work performance 
with you? 

8-12 times or more ( ) 

5-7 times ( ) 

3 times ( ) 

2 t ime s ( ) 

1 time ( ) 

No time ( ) 

16. How satisfied are you with your boss's discussions 
with you about your work performance? 

More discussion than I desire ( ) 

Discussion was about right ( ) 

More discussion is needed ( ) 

Much more discussion is needed ( ) 

17. Do you know what your boss wants you to get done 
during the coming year? 

Yes; we have discussed it ( ) 

I have a pretty good idea ( ) 

I ' m not sure ( ) 

I have no idea as to his expectations... ( ) 

18. How aware is your boss of the job you have to do 
and how well you are doing it? 

He pretty well knows what is going on... ( ) 

Most of the time he is well aware ( ) 

Sometimes he is aware ( ) 

Rarely is he aware ( ) 

When he does give it attention, he 

doesn't understand what's going on ( ) 

19. Is your boss objective in evaluating those he supervises? 

He sees things the way they are ( ) 

Most of the time he is ( ) 

Many times he is fooled by his people... ( ) 
It is easy for his people to cover up 

their poor performance . . . .- ( ) 

He doesn't evaluate, or he goes by 
personality rather than work performance ( ) 

20. How often during the past year have you specifically 
discussed your evaluation of the work performance of 
your operators (those you directly supervise) with them? 



8-12 times/man or more.... 

5-7 times/man 

3-4 times/man . , 

2 times/man , 

1 time/man , 

No times or only with a few, 
66 



VI. THE INCENTIVE PLAN 

The incentive plan offered in this chapter is designed to 
increase the marginal physical product of labor by providing 
an incentive object in the form of money or time off that may 
be earned by the individual keypunch operator in reward for 
her demonstrated increased productivity. The keypunch in- 
centive plan is centered around a Procedure Time Model for 
each documented keypunch procedure. This model is initially 
mathematically predetermined on the basis of the results of a 
time test, but adjusted over time to reflect the current pro- 
ductivity level of the installation. Daily system inputs 
include production data at the job level from the operator 
(or her machine) , supervisor input on non-productive operator 
hours (training, leave, etc.), and input on the jobs that are 
backlogged. A series of computer programs, written in COBOL, 
are used to create the system and to produce a periodic re- 
port output tailored to the organizational structure. 

The following sections outline the action required to 
create and maintain the Procedure Time Model, the system 
files, the input data collection procedures from machine 
operations and the supervisor, the calculation of production 
effectiveness and incentive hours earned, the basic reports, 
and the MUACS option for Naval Supply Centers. 

A. THE PROCEDURE TIME MODEL 

Before a job or employee can be measured, a ruler must be 

provided. This ruler must accurately represent existing 

67 



conditions if it is to bo the base of a payroll system, 
provide a continuing competitive incentive, and portray an 
up-to-date comparative measure of unit productivity. The 
ruler for this thesis is the Procedure Time Model. "Pro- 
cedure" because there is one time model for each recognized 
and documented keypunch evolution. "Time" because time is a 
unit of measurement that is both convenient and universal to 
all jobs and installations. "Model" because it is an ideal- 
ized representation that describes the keypunch evolution for 
one procedure and reveals important relationships between the 
operator, her machine, and the source document. The use of 
modeling permits the indication of relevant data, facilitates 
dealing with the entire problem, and permits the use of the 
computer to perform the analysis of data and consolidation of 
results. 

A logical property of a model is that its solution is only 
good as long as the model is good. For this reason, the Pro- 
cedure Time Model is not a time standard in the sense of Time 
and Motion Study. Rather, it is a self-adjusting level-of- 
performance indicator that will be used in comparison with 
actual operator output. This concept yields two major benefits 
to management. First, the accuracy of the initial Procedure 
Time Model, while important to the speed at which the system 
stabilizes, is not critical to the long run ability of the 
system to perform. Second, the population of Procedure Time 
Models will be moulded over time to the particular character- 
istics of the particular installation, taking into lump-sum 

68 



consideration the difficult to measure variables such as 
environment attitude, personality, effect of social status 
rewards in off -the- job relations, and a multitude of other 
variables. For the operator the system offers a realistic, 
accurate, and competitive yardstick for the equitable dis- 
tribution of rewards on the basis of personal effort and 
ability. 

Initially the time model must be established as if the 
"average worker" were available for measurement. The accept- 
able methods for establishing time standards are through the 
use of Standard Data, Time Study, Methods Time Measurement, 
and/or Work Sampling. The details of these methods will not 
be discussed here since they are readily available from any 
primer on Time and Motion Study. All are valid methods 
but all require talented specialists and a considerable amount 
of time. Considering that an activity may have one hundred, 
two hundred, or more different keypunch evolutions this task 
can become an untenable expense if it were to be done manually. 
Fortunately, through the use of the computer, the time required 
to establish these initial benchmarks can be greatly reduced 
as can be the expertise requirements of the personnel pro- 
viding the information. While this may raise a question of 
accuracy, accuracy is an economic, not an engineering con- 
sideration. With the self-adjusting properties of the 



26 See Niebal (1958) 



69 



Procedure Time Model the slight loss in accuracy is of little 
relevance when compared to the significant savings in imple- 
mentation manpower cost. Additionally, it might be questioned 
as to how accurate one can get. Accuracy here can only be 
validated over time since there is no "exact" way to do a 
particular keypunch operation. What works for one operator 
may not work for another. The Procedure Time Model thus must 
attempt to determine an average time to do an operation. If 
the operator performs identically to the Procedure Time Model 
approximation, the job will be accomplished as planned. The 
probability, however, is greater that the operator will 
deviate from the planned path. If the operator performs with 
an expectable degree of intelligence and skill the time 
actually consumed and the planned time will be about the same. 
If it differs, the Procedure Time Model must be sufficiently 
flexible to move in the direction of the variance while 
historically retaining for data processing management review 
the relative magnitude and direction of the evolution. 
1. Initial Creation of the Procedure Time Model 

The creation of the Procedure Time Model is a complex 
process of meshing many variables into a best estimate of 
productivity. The sequence of events that will be described 
in detail starts with the documentation of every acknowledged 
keypunch procedure. Most installations already have this 
documentation and so this step is at most a clerical process. 
At the same time, the experience of the unit supervisor is 

70 



called upon in the selection of a representative cross-section 
of established procedures routinely performed by the instal- 
lation. Keypunch operators from the installation will perform 
one or more of these procedures and be timed. The results 
of this time trial will be combined with the procedure docu- 
mentation in the predetermination of the Procedure Time Model. 
The end result when combined with an Operator Identification 
File will be the system file ready for implementation, 
(a) Units of Measurement 

The basic unit of measurement of the system is 
the "Time Measurement Unit." The Time Measurement Unit is a 
term familiar to Time and Motion Study and is referred to as 
a "TMU." Table V shows the conversion of TMU's to standard 
clock time. 

If the Procedure Time Model is to be predetermined 
with sufficient accuracy to enable initialization and stabi- 
lization of the system within an effective time frame, the 
relationships of the various elements that comprise a key- 
punch evolution must be defined. While many elements will 
vary significantly from installation to installation based on 
everything from the color of the walls to the personality 
of the supervisor, the fact that all keypunches function 
basically on the 64-character standard keyboard permits the 
declaration of the primary procedure elements as constants. 
These primary procedure elements are shown in Table VI and 
apply to mechanical punches of the IBM 029 variety. 

71 



TABLE V 



TMU - TIME MEASUREMENT UNIT CONVERSION TABLE 



1 


TMU 


= 


.00001 hours 


1 


TMU 


= 


.00060 minutes 


1 


TMU 


= 


.03600 seconds 


1 


Hour 


= 


100,0 00 TMU's 


1 


Minute 


= 


1,67 TMU's 


1 


Second 


= 


28 TMU's 



TABLE VI 



PRIMARY KEYPUNCH PROCEDURE ELEMENTS 



Equivalent Level 
Procedure Elements Unit of Measurement of Difficulty 



Numeric 

Alphabetic 

Alphameric 

Manual Duplication 

Manual Skipping 

*Auto Duplication 

*Auto Skipping 

Manual Dup/Skip 
*Auto Dup/Skip 

*delete for machines that electronically duplicate and 
skip. 



For machines that electronically duplicate and skip, the 
asterisked procedure elements in Table VI that deal with 
automatic duplication and skipping should be deleted. 

The first group of the primary keypunch procedure 
elements listed in Table VI is self-explanatory in that they 



72 



Columns 


1.00 


Columns 


1.20 


Columns 


1.40 


Columns 


0.60 


Columns 


0.08 


Columns 


0.30 


Columns 


0.04 


Times 


2.20 


Times 


1.20 



are standard functions of the machine operation. The 
equivalent levels of difficulty were estimated with numeric 
punching as a base with a weight of 1.0 per column punched. 
Accordingly, aphabetic punching is slightly more difficult 
and a larger weight is attached to that type of activity. The 
remaining elements of the first group were established in the 
same manner. Concerning the last group of two primary pro- 
cedure elements, the operations of duplication and skipping 
require a shift in the concentration of the operator. This 
shift is compensated for by adding a TMU factor for each 
occurrence. 

There are additional known differences in pro- 
cedures due to the source document. The evaluation of these 
differences, while mainly subjective, are, nevertheless, well 
known to the operator and it is advantageous to include this 
knowledge in the predetermination of the Procedure Time Model. 
Procedures can be complicated due to poorly engineered 
documents that require the operator's eyes to jump around the 
document. Carbon copies, poor penmanship, and documents 
filled with irrelevant data can all add to the time require- 
ments of a particular procedure documentation. The units of 
measurement for the evaluation consist of subjective ratings 
of excellent, good, fair, or poor. 

(b) Preparation of Procedure Documentation 

Preparation of the procedure documentation for 
each keypunch evolution is basically a clerical operation, 

73 



but it is beneficial ' to have the work performed by a key- 
punch operator experienced in the various procedures per- 
formed at the installation. The documentation consists of 
three records - a header, the entry format, and the veri- 
fication format. The formats of these records are shown in 
APPENDIX B. The header contains the procedure number, a 
suffix (for multiple record outputs) , source document 
evaluation ratings, and record size. Additional optional 
entries are provided for procedure name and MUACS code. The 
entry and verification format records consist of standard 
format control records (i.e., IBM 029/059 program drum control 
cards) . 

There will undoubtedly be a few jobs that cannot 
be documented such as "Punch Print Return," "999," "Corrections," 
or any of the other tags used to describe miscellaneous jobs 
that escape from true identity. Also, the installation may 
have instituted various "Hotline" operations that vary from 
low volume inputs of standard procedures to miscellaneous 
and correction punching with no verification. Such operations, 
due to their extremely variable nature, will not qualify for 
earning incentive hours and will not be documented. 

Remote terminal operations also vary greatly 
from installation to installation. At the present time this 
function will be excluded from this thesis although the 
desirability of including this increasingly important activity 
is strong. 



74 



Each keypunch procedure will be reviewed for 
legibility (penmanship - typed or handwritten) , contrast 
(original or carbon, colored paper), continuity of fields 
(degree of jumping around on the document) , difficulty 
in handling (large or multiple source documents) , and com- 
plexity (front and back information, document filled with 
irrelevant data, etc.). The procedure is rated in each of the 
above areas as being excellent, good, fair, or poor. These 
ratings are then entered in the header card as specified in 
the header card format in APPENDIX B. Since it is possible 
to more than double the time allowed for any job through the 
results of the source document rating, the reviewer must be 
consistent and accurate in his evaluation. 

The documentation is then reviewed for accuracy 
of coding via the COBOL Computer Program Number 1. In return, 
the keypunch supervisor will receive the input documentation 
cards and an error listing in the same sequence as the input. 
Once the errors have been corrected and re-validated, the 
documentation is held pending completion of the time trials, 
(c) Time Trials 

The Procedure Time Model is predetermined on the 
basis of how long it takes the particular installation to 
punch and then to verify one character of numeric data. These 
two time factors are obtained from a series of time trials 
and entered by a programmer into the program that calculates 
the initial Procedure Time Model. 

75 



The time trials are based on representative 
samples of procedures and operators. Since this thesis is 
applicable to any keypunch installation, only rough guide- 
lines can be offered as to proper sample sizes. The ultimate 
sample sizes selected should be determined on the basis of 
desired accuracy and the cost of conducting the trials. If 
the installation has 150 documented procedures and 30 operators, 
the recommendation would be to select 15 jobs and use all 30 
operators . 

Once the procedures have been selected based on 
their representative nature of the type of work performed by 
the installation, fictitious batches are created from actual 
source documents. The batch size should be such that the 
data entry operation will consume 15 to 20 minutes. Each 
participating entry and verifier operator is then assigned 
and timed on their performance in completing the job. The 
operator should be allowed to set up the job and machine prior 
to starting the trial and use a format control record (program 
drum card) if this is typically done for the procedure being 
performed. The time should be recorded from first punch to 
last punch with the operator proceeding at her normal speed. 
It is recommended that the time recorder not stand near the 
operator during the trial. Upon completion of the time 
trial, the procedure number and time result should be recorded 
with the entry and verification trials being kept separate 
through all trials and subsequent calculations. If any entry 

76 



operation results in more than a 3% error rate, that time 
trial must be rejected and the task repeated by another 
operator because jobs with more than a 3% error rate would 
invalidate the follow-on verification time trial. 

The TMU factors for entry and verification will 
be calculated using the formula shown in Table VII. The 
calculations must be performed twice. Once using only the 
entry results and once using only the verification results. 

The entry and verification TMU factors are then 
patched by a programmer into Computer Program Number 2 that 
calculates the predetermined Procedure Time Model and creates 
the system file. The TMU factors are patched into the pro- 
gram so that they will be readily available in the future when 
changes and adds are processed ' that will require recalculation 
of the Procedure Time Model. 

2 . Routine Adjustment of the Procedure Time Model 

Daily, jobs are received, batched, and completed by 
the keypunch installation. Each batch has a control form 
which upon completion of the job is retained by the keypunch 
supervisor. The accumulation of these batch control forms 
over the month provides the input to the program that adjusts 
the Procedure Time Models. The results of actual monthly 
production is averaged with the Procedure Time Model by 
Computer Program Number 4 using the formula in Table VIII. 
The formula uses a moving four month average of actual pro- 
duction in addition to the predetermined procedure time in 

77 



TABLE VII 



CALCULATION OF THE BASIC NUMERIC TMU FACTOR 



z 



TMU FACTOR 



where : 



fc i 



n 



ID 



f . 
3 



J i 



i 



/s 



1.2 - (0.04) (5Z c k ) 

_ 



N 



= results of time trials for trials i = 1, 2, .. 

= number of occurrences of the procedure 

elements j = numeric, alpha, ... for trials 

J- — " J- / ^* f • • • 

= equivalent levels of difficulty for procedure 
elements j = numeric, alpha, ... 

= numeric conversion of the five quality 

ratings of the source document for k = 1, 2, 
..., 5 where the rating excellent = 1, 
good =2, . . . , poor = 4 (see page 75) . 

= number of time trials 



TABLE VIII 



ADJUSTMENT OF THE PROCEDURE TIME MODEL 



2p 



+ a_ + l— 



PROCEDURE TIME MODEL = 



i=l 



where : 

p = Predetermined Procedure Time Model 

a c = actual production data for the current month 

a^= actual production data for prior months i = last 
month, 2 months ago, and 3 months ago. 



78 















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79 



order to dampen any violent or sudden changes on the basis 
that such deviations are unusual, and while they may key a 
trend, cannot be deterministic in major model shifts. The 
original predetermined estimate carries a double weight in 
the formula and serves two purposes. First, if the instal- 
lation experiences large productivity gains, the predetermined 
estimate holds the model back thus giving the operators a 
greater initial reward. It prevents the standard from 
reaching the new high thus guaranteeing continuing rewards 
for universal outstanding productivity and provides a con- 
tinuing incentive to maintain this high level. Also, it 
softens the blow of any sudden drop in productivity from this 
high level. The second reason for including the predetermined 
estimate is in the case where productivity declines below the 
initial level. In this case the predetermined level will 
assist in keeping the carrot before the cart, highlight low 
productivity, and protect a downward spiralling installation 
by slowing the decline of the model. 

The new Procedure Time Model will be used the 
following month. The reason for the delay is to give manage- 
ment a full opportunity to review the recalculation and take 
action in the case of questionable deviation. The report 
shown in Table IX' will be provided. The report lists all 
procedures first in procedure number sequence and then again 
in procedure number sequence within percent change in 
Procedure Time Model. 



80 



3 . Sensitivity Analysis 

There are many factors that can change the productivity 
level of an installation. Some are subtle and occur without 
identification, some are dramatic and of obvious origin. Some 
are difficult to measure and all will rapidly invalidate any 
fixed productivity indicator. The basis of this system, the 
Procedure Time Model, is an indicator that will slowly drift 
upward or downward as changes occur to effect productivity. 
It can accommodate many factors, but some could create such a 
large shift in productivity that it would be better to start 
over and recalculate the predetermined time model. 

(a) Factors that Suggest a Need for Recalculation 
The most obvious need for recalculation would be 

a change in hardware. Such changes are usually made due to 
aspirations for higher productivity. It is best in such cases 
to recalculate after the operators have a few months experience 
on the new machines and new time trials are run. 

(b) Factors for which Adjustment can be Automatic 
Minor changes in the workspace environment, 

organization, or personnel can be accommodated by the Pro- 
cedure Time Model update. Any new procedure or change to an 
existing procedure will involve a recalculation, but the re- 
calculation is performed automatically by the program that 
updates the system file. If management disagrees with any 
resultant model, methods are available to set the time where 
desired via a management override card. 

81 



B. THE OPERATOR IDENTIFICATION FILE 

The Operator Identification File is an input to the 
system file. The Operator Identification File consists of 
one record for each keypunch employee. This includes all 
keypunch supervisors but not remote terminal operators. The 
operator identification record contains the operator's name, 
number, shift, pay grade, and step. The format of this record 
is provided in APPENDIX B. The Operator Identification File 
is combined with the procedure documentation and processed by 
Computer Program Number 2 in the creation of the system file. 
Operator identification records coded add, change, or delete 
are also processed by this program in follow-on updates to 
the system file. 

C. THE SYSTEM FILE 

There is one file in the system and it can be maintained 
on cards, tape, disk, drum, or data cell with appropriate 
modifications to the COBOL program file description and the 
Job Control Language (JCL) . The file contains three records - 
the operator identification record, the procedure description 
header, and the Procedure Time Model. The format of each of 
these records is provided in APPENDIX B. 

The files are created and updated by Computer Program 
Number 2. The input to the program consists initially of the 
Operator Identification File and the procedure documentation. 
Updates are performed by the same program by inputting 



82 



operator identification and procedure documentation records 
coded add, change, or delete as described in the input 
description documentation for Computer Program Number 2. Any 
Procedure Time Model can also be changed by a management over- 
ride card which is a specially coded card in the format of the 
Procedure Time Model record as shown in APPENDIX B and 
described in the input description documentation for Computer 
Program Number 2 . 

i D. INPUT DATA COLLECTION 

Many of the new key-to-tape, key-to-disk and buffered 
punch hardware systems will provide production data either in 
the form of a punched card or a data bank that can be retained 
until requested. Such methods are superior to manual methods 
since they are usually more accurate and reduce the clerical 
operation time of entering such data in a utilization log. 
For the purpose of this system, however, a batch control form 
will be utilized to provide uniformity and ease of future 
modification as the newer hardware becomes available. 

In addition to the production statistics obtained from 
the batch control form, the supervisor is responsible for re- 
porting exception utilization of employee manhours and a 
daily measurement of all work queued for processing. 

1. The Batch Control Form 

The batch control form, shown in Table X, will arrive 
in keypunch or at a keypunch hotline with the procedure block 



83 



TABLE X 



THE BATCH CONTROL FORM 




and number of source documents block already completed. In 
the main keypunch unit, the supervisor is responsible for con- 
trol over all jobs. If the data entry hardware does not have 
a record counting capability, the supervisor must verify the 
record count. Additionally, many requests do not contain an 
economical batch size and must be bundled together with a 
master batch control form, processed, and separated again by 
the supervisor after job completion. Some jobs contain too 
many records for one employee to efficiently start and complete 
in the remaining time available; such jobs must be split apart 



"? 7 

* The definition of an economical batch size varies from 

installation to installation. An economical batch according 
to this thesis will be a batch that contains sufficient source 
documents to occupy an operator for 4 5 to 50 minutes. 

84 



by the supervisor, separate batch control forms attached, 
processed, and rejoined by the supervisor at job completion 
time. The point being made is that the supervisor should not 
be a pail passer in the local fire brigade. Rather, the 
supervisor should exercise control over batch sizes to obtain 
economically sized jobs and equitably distribute the work to 
the operators. 

Upon receipt of a job, the operator will enter her two 
digit operator number and the start time. The verifier will 
make the same entries plus an additional entry on the number 
of cards that contained errors. All operators will enter the 
appropriate two letter pay code if they are working other 
than regular time, i.e., night time differential (NT), over- 
time (OT) , compensatory time earned (CE) , or holiday premimum 
(HP) . As each operator completes the job she will enter the 
stop time. If there were no errors, the corrections section 
will be left blank. If the verifier operator makes the 
corrections, only the verifier column is completed. If a 
keypunch operator makes the corrections and then a verifier 
operator verifies the corrections, the two operators will 
enter the production data in the corrections block identically 
to the way it was entered in the initial process block. Since 
correction time is not considered as qualifying time for in- 
centive calculations, the start and stop times for such 
operations must be entered on the batch control form by the 
supervisor when the job is assigned and returned completed. 

85 



The operators at the hotline stations will receive 
the same batch control form on jobs submitted but need only 
complete the initial process section by entering their operator 
numbers and pay type if other than regular. Any additional 
clerical effort would be detrimental to the function of hot- 
line. Since there is presently no incentive plan for hotline 
operators, some equitable rotation plan should be initiated 
by the installation for these employees. 

Upon completion of the keypunch and verification 
evolution the batch control form is removed by the supervisor 
and retained for punching and inputting to the system. In 
commands where it is desirable to have a copy of the batch 
control form continue on with the job or be returned to the 
user, the printing of the form on carbonless (NCR) paper has 
been beneficial. 

It should be noted that while the job start and stop 
time is written on the batch control form during the initial 
processing of the job, elapsed job time is not a production 
effectiveness data element. The production effectiveness 
and incentive reward calculations are based on comparing the 
time allowed by the Procedure Time Model to the time available 
for production. The time available for production is defined 
as the workday less all authorized absences such as breaks, 
correction time, and those operations listed in Table XI. For 
this reason, the Supervisor Exception Log, to be discussed next, 
is of importance to the system. 

86 



2 . The Supervisor Exception Log 

The keypunch supervisor must provide data on all 
exception utilization of employee manhours. Such reporting 
will include all types of absenteeism, training, clerical, 
and non-standard keypunch assignments. The shift supervisor 
will enter in the Supervisor Exception Log, shown in Table 
XII, the total number of hours each employee spends each day 
performing the duties listed in Table XI. 

TABLE XI 

EXCEPTION WORK CODES 
OPERATIONS CODE 

Clerical work CL 

Formal classroom training TF 

On-the-job training or informal training TJ 

Training assignment to the TAB room TB 

Annual leave LA 

Sick leave LS 

Holiday leave LH 

Administrative leave LE 

Compensatory time taken CT 

Assignment to a Hotline (keypunch) HK 

Assignment to a Hotline (verifier) HV 

Assignment to a remote terminal (temporary) . . . RM 

The Supervisor Exception Log may be maintained in 

either a log book, a lined pad, or a special form. It should 

be similar to the format shown in Table XII. The operator's 

numeric operator number (1 to 3 digits) will be entered 

followed by the work code from Table XI. The time so spent 

in hours and tenths will be entered as will the appropriate 

pay scale code from Table XIII. 



87 



TABLE XII 



SAMPLE SUPERVISOR EXCEPTION LOG 





OPERATOR 


WORK 


HOURS & 


PAY 


DATE 


NUMBER 


CODE 


TENTHS 


TYPE 


12/15/72 


05 


LA 


8.0 






10 


TF 


1.0 






12 


CT 


8.0 






07 




5.7 


ND 




07 


TJ 


3.0 


ND 




25 




5.7 


ND 




25 




1.0 


OT 




25 




1.0 


NS 



TABLE XIII 



PAY CODES 

FUNCTION CODE 

Regular time BLANK 

Night-time differential during normal shift hours ND 
Night-time differential outside normal shift 
hours while earning overtime, holiday premium, 

or compensatory time NS 

Overtime OT 

Earning compensatory time CE 

Holiday premium HP 

The supervisor exception log will also be used to 
accurately report employee manhours spent earning additional 
pay such as overtime or night-time differential. The super- 
visor will enter the operator's number as before, but the 
work code will be left blank since the actual work performed 
will be reported via a batch control form or another super- 
visor log entry. This entry is only to accurately report 
exception time for payroll purposes, not to report what work 

88 



was done. The time will be entered in hours and tenths 
followed by the pay type from Table XIII. The following 
explanations are offered of the entries in the sample log 
to help clarify the use of the log. 

OP NR 05 - took one day annual leave. 

OP NR 10 - Had one .hour formal classroom training. 

OP NR 12 - Took one day off after having earned 8 
hours compensatory time. 

OP NR 07 - A normal swing shift employee who received 
her normal 5.7 hours of night-time 
differential and three hours of on-the-job 
training during the part of her shift where 
she was earning night-time differential. 

OP NR 25 - A normal swing shift employee who received 
her normal 5.7 hours of night-time 
differential but after the end of the shift, 
worked an additional hour of overtime. 
Since she normally earns night-time 
differential, she will also earn night-time 
differential while she is earning overtime 
but because it is outside her normal hours, 
the code used is "NS" vice "ND." 

3 . Backlog Statistics 

Backlog statistics are reported as of a fixed time 
each day for input to the optional MUACS routine for Naval 
Supply Centers. Since the term "backlog" is open to many 
interpretations, it will be defined as being all work in 
progress and queued for processing. The format shown in 
Table XIV will be utilized to record the necessary information. 
Either a log book or a lined pad should provide a satisfactory 
form. 



89 



The supervisor will enter the date in the log and the 
procedure number of each job backlogged. If the job is at 
the point where both punching and verifying are required, the 
code entry will be left blank. If the job has been punched 
but not verified, the code "V" will be entered in the code 
column. The input document count from the batch control form 
will be entered as the volume. 

TABLE XIV 

BACKLOG STATISTICS LOG 





PROCEDURE 


DATE 


NUMBER 


12/15/72 


238D2 




038S1 




038S1 




038S1 




038S1 




465D2 




543A1 



CODE 



V 
V 
V 



VOLUME 

1,000 
345 
986 
543 
245 
123 
253 



E. CALCULATING PRODUCTION EFFECTIVENESS AND THE INCENTIVE 
REWARD 

Two calculations are made in evaluating employee perfor- 
mance. The first is to calculate a production effectiveness 
indicator that will be used for comparing group performance, 
employee performance, and performance trends. The second 
calculation is to determine the incentive rewards earned. 

Employee production effectiveness is determined by taking 
the ratio of how long the job should have taken to how much 



90 



time was available to do the job. The time allowed to perform 
a job is calculated by multiplying the respective Procedure 
Time Model by the volume of records in each job performed. 
Because no operator can or will work 60 minutes of every 
hour or maintain top speed throughout the day, an extra 
allowance is .applied for Personal., Fatigue, and Miscellaneous 
time. This allowance is in the form of a management set per- 
centage of total allowed keying time with 15% being used in 
this thesis. An additional five minutes per job is added to 
account for set-up time. The time available to perform the 
work is calculated by taking the basic time available or 7.5 
hours (8 hours less 1/2 hour to account for two authorized 15 
minute breaks) and subtracting all non-productive time re- 
ported in the Supervisor Exception Log and time spend in making 
or verifying corrections. This ratio is shown in the formula 
in Table XV. 

The incentive reward calculation uses the same concept of 
available time and the production effectiveness indicator in 
determining the number of incentive hours earned. These hours 
earned may either be reported as incentive hours earned for 
pay or time off purposes depending upon the option selected by 
the operator. The incentive reward calculation employs an in- 
centive base factor that determines at which point incentive 
calculations are to start. In a labor market where the hours 
of work offered by the workers equals the hours of employment 
offered by management this factor is 100. If the market is 

91 



TABLE XV 



PRODUCTION EFFECTIVENESS FORMULA 



PE = 



f n 

p ( y m L v ± ) 

100,000 12 



7.5 t a - t e 



J 



-4 + 



/ 



where : 
P = 

m. = 
i 

v • = 
l 

n = 
t_ = 



e = 



Personal, Fatigue, and Miscellaneous Time Factor 
(set at 1.15 for 15%) 

Procedure Time Model time in TMU ' s (100,00 TMU = 
1 hour) for job i = 1, 2, ... 

record volume of job i = 1, 2, ... 

number of jobs performed 

time available expressed in work days 

summation of the exception times reported in 
the Supervisor Exception Log and the time 
spent making or verifying corrections. 

average error rate if 2% or more (applied only 
to the keypunch PE portion of overall PE) 



such that the supply of worker hours is below the hours re- 
quired at a particular wage rate, the incentive base factor 
may be decreased as necessary in order to generate the in- 
creased wage rate needed to secure employees. The advantage 
here is that no modification need be made to a formal wage 
plan used for other employees and the incentive wage plan can 
be used to adjust to labor market fluctuations. The formula 
for incentive hour calculations is shown in Table XVI. 

92 



TABLE XVI 



INCENTIVE HOURS FORMULA 





r 


■ •»■ 


f ^ 


INCENTIVE HOURS 


7.5 t - 


" fc e 


PE - I 




200 




k 


/ 


\ ) 


where : 









t = time available expressed in work days 

t = summation of the exception time reported in 

the Supervisor Exception Log and the time spent 
making corrections 

PE = Production Effectiveness 

I = Incentive base. A base effectiveness level from 
which incentive calculations will be made. This 
thesis will consider all performance above 100% 
(I = 100) as qualifying for incentive rewards. 



There are three critical data elements in the calculations 
of Production Effectiveness and Incentive Hours that demand 
careful attention. These elements are the Procedure Time 
Model, the input volumes, and the inputs from the Supervisor 
Exception Log. If any one of these inputs is reported in 
error either through design or neglect, the incentive hours 
earned would be wrong and the results could be expensive in 
terms of payroll funds and employee attitude. If these three 
elements are monitored, the system will provide an incentive 
whose limit is dictated only by the probability of an operator 
surpassing the average performance of the installation. For 
example, if an operator performs 12 hours of work in 80 hours, 
she will receive 20 hours of incentive pay or time off, but 

93 



the probability of any operator performing 12 hours of work 
in 80 hours is very small. Since this system has never been 
implemented, no actual ceiling has been observed. Neverthe- 
less, an attempt at predicting system cost behavior will be 
made in Chapter VIII. 

The report shown in Table XVII is produced by Computer 
Program Number 3. The report is provided at the individual, 
shift, and installation total levels. The individual level 
report is provided for employee counselling and performance 
evaluation. The shift reports and competitive group reports 
are provided for publication of group competitive indicators 
on a simple graph in the workspace and review by the unit 
supervisor. The installation level report is provided for 
review by higher levels of data processing management. 

F. MUACS OPTION FOR NAVAL SUPPLY CENTERS 

As a part of the Defense Integrated Management Engineering 
Systems Survey Program (DIMES) the Management Utilization and 
Control Standards Program, or MUACS, was developed for use in 
the Naval Supply Centers. MUACS is designed to measure 
employee productivity for all tasks performed at a Naval 
Supply Center. It consists of a table of standards that are 
matched with actual employee performance to form a ratio of 
employee productivity. The standards for keypunch are 
engineered standards based on Time and Motion Study where, 
like this thesis, the unit of measurement is the Time Measure- 
ment Unit expressed in hours where 1 TMU = .00001 Hours. 

94 



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The actual performance is reported in workunits completed 
(records punched or verified) and the time consumed to per- 
form the task. For example, if a standard allowed .00620 
hours per record punched and an operator punched 1000 records 
in 7 hours, the production efficiency would be (.00620 x 
1000) / 7 = .885 or 88.5%. 

The report shown in Table XVIII is provided as an 
optional feature of Computer Program Number 3. It lists the 
work units (record count) completed and backlogged under the 
various production categories of the MUACS system. It is 
designed to facilitate the data collection effort for the 
Naval Supply Center MUACS system, but may provide information 
of interest to any data processing installation. 



96 



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97 



VII. SELECTION OF KEYBOARD DATA ENTRY SYSTEMS 

In the family of data entry equipment, genus "keypunch," 
there are four species: card punch and card verifier, buffered 
card punch/verifier, key-to-non-compatible and key-to- 
compatible computer tape, and key-to-disk or drum. Depending 
upon the volume and nature of the data preparation evolution, 
each machine could be optimal in the data processing environ- 
ment. 

Card punch and card verifiers of the IBM 02 9 and 059 
variety are direct descendants of the machines in use over the 
past seven decades. ° Their use is best confined today to 
small decentralized operations and areas where the electronics 
expertise of maintenance personnel may be a problem (i.e., 
combat zones, shipboard use). The primary drawbacks of this 
equipment are that: (1) mechanical speeds are significantly 
slower than electronic speeds in duplication and skipping, 
(2) error correction is clumsy, (3) separate machines are 
required for entry and verification, (4) there is an 80- 
column limitation per record, (5) it is difficult to 
selectively verify multiple card records, (6) errors caught 
by computer validation must recycle through the entire process, 

and (7) mechanical equipment is subject to greater wear than 

29 

electronic circuits. 



28 

Cary, Robert F. , "A History of Keyboard Data Entry 

Equipment," DATAMATION, June 1970, p. 79. 

29 EDP ANALYZER , Vol. 9, No. 10, October 1971, p. 11. 

98 



Buffered card punch/verifiers of the UNIVAC 1710/1701 
and IBM 129 variety represent the latest evolution in card 
punching. They are vastly superior to the prior types in 
that they perform all entry operations electronically in one 
80-column buffer, while the alternate 80-column buffer is 
being mechanically punched. For operations that cannot 
eliminate their dependency on the punched card, this is the 
best alternative. 

Key-to-non-compatible and key-to-compatible computer tape 
are similar to each other except that the former uses tape 
cartridges and the latter uses standard computer tape reels. 
The advantage of this type of equipment is that the 80-column 
barrier is potentially broken, and yet each station is a stand 
alone machine. Disadvantages include (1) relatively high 
set-up time, (2) difficulty in interrupting jobs, (3) lost 
time and motion due to the fact that errors caught at computer 
validation must recycle through the entire process, and (4) 

mechanical equipment being subject to greater wear than 

i *. • • •. 30 
electronic circuits. 

Key-to-disk or drum represents a significant improvement 
in data entry equipment capability because of increases in 
productivity due to the replacement of mechanical machine 
functions with electronic circuits and the ability of its 
small on-line computer to manipulate and validate data. Key- 
to-disk or drum combines the best of the potentials of variable 



30 Ibid. , p. 12. 



9 9 



length records, electronic speeds, and format control. Since 
its use is new, it will be the topic of the remainder of this 
chapter. 

Most of the available literature on the subject of key-to- 
disk or drum can be divided into two categories - one dealing 
with hardware specifications, and the other with the results 
experienced by companies that have installed the equipment. 
The approach taken in the remainder of this chapter is similarly 
divided. 

The first task was to develop general and specific hardware 
requirements based on the advice and recommendations offered 
by private and Navy sources. *- The requirements outline the 
features that should be considered in comparing different 
systems . 

The second part of this chapter reports on the experiences 
of a few Navy installations and private companies that have 
utilized key-to-disk or drum equipment. The Naval Supply 
Center at Newport, Rhode Island, has been the Navy's test site 
for this type of equipment since 1970. Since 1971, the Naval 
Supply Center at Oakland, California, has installed a system 
and in September 1972, installations took place at the Naval 



3 1 

The specifications represent a composite of: 

(a) EDP ANALYZER , Vol 9, No. 9, September 1971. 

(b) EDP ANALYZER , Vol 9, No. 10, October 1971. 

(c) Trimble, G. R. and Penta, A. J., "Evaluation of 
Keyboard Data Entry System," DATAMATION , June 1970, 
p. 93-99. 

(d) Interview with CDR John Briggs, SC, USN , Director 
of Data Processing, Naval Supply Center, Long 
Beach, California, 17 July 1972. 

100 



Supply Centers at San Diego, Long Beach, and Puget Sound. In 
addition to reporting on what action the Navy has taken, a 
sampling of civilian industry experiences is offered in 
further support of the value of key-to-disk or drum systems. 

A. HARDWARE REQUIREMENTS 

1 . General Hardware Description 

a. Configuration 

Each system is comprised of a processor, an immedi- 
ate access storage device (disk or drum) , a magnetic tape unit, 
a supervisory console, and keyboard entry stations, as shown 
in Table XIX on page 127. 

b. Processor 

The processor has sufficient speed, capacity and 
capability to simultaneously process all data entered from 
the key data entry stations connected to the system; to con- 
trol all input, storage, and output devices including the 
supervisory console; and to perform data management operations. 

c. Immediate Access Storage Device (Disk or Drum) 
The on-line immediate access storage devices are 

available in a wide range of capacities. The device accumulates 
the data entered, displays the data for key verification, and 
permits selective pooling of output jobs onto the magnetic 
tape device. It may also be used to receive data from the 
tape device for further entry - a process called "turnaround." 
The immediate access storage device is not connected to the 
main frame computer system of the installation. The average 



101 



access time of the immediate access device is 150 milli- 
seconds. The systems have warning indicators when the 
device is approaching capacity. 

d. Magnetic Tape Unit 

The tape unit is capable of reading and writing 
standard 10 1/2-inch diameter, 24.00 --foot reels of computer- 
compatible tape at 800 bits per inch in either 7- or 9-track 
configuration. The drives move the tape during data transfer 
at a minimum of 20 inches per second. Immediate read-after- 
write checks with error indication and retry capability are 
provided. 

2 . Specific Hardware Requirements 

a. Keystation 

(1) It should have a standard IBM 029 style, 
sixty-four character set layout. 

(2) It should display by non-hard-copy means at 
least the last character entered and preferably the entire 
record. Displays must be in English graphic. 

(3) The position indicator must be prominently 
displayed. 

(4) Position control features must permit back- 
space and forward space by character, by fields, and by record 
during either entry or verification. 

(5) The control switches must be convenient to 
operate but must preclude the likelihood of accidential 
operation. 

102 



(6) The keystation should consist of a desk-like 
structure with a surface for source documents (11" x 14"), 
keyboard, and display device. 

(7) The system must be capable of both entry and 
verification at each station. 

(8) The system must permit the start of verifi- 
cation by a second operator at another station anytime after 
50 records have been entered. 

(9) The system must be capable of correcting, 
deleting or adding records during entry or verification. 

b. Formatting 

(1) The system must be capable of providing up to 
four record formats of variable length to the operator for 
continuous or cyclic use during a job. 

(2) The system must be capable of accommodating 
a library of up to 200 different variable-length formats. 

(3) Updating the format library must be possible 
via a pre-recorded program library tape and through the 
supervisor's console keyboard. 

(4) The same or different formats must be 
available to all stations at the same time. 

(5) The format must be in the to 2 0+ character 
range with no limit on the number of fields per record. 

(6) The format must provide for automatic and/or 
operator controlled duplication and skipping, blank fill, left 
zero fill, and left or right justification. 

103 



(7) It is desirable that the device be capable of 
generating data for fields such as data or sequence number 
and cross-foot fields by adding, subtracting, dividing, or 
multiplying (i.e., extended price). 

(8) It is desirable that the device be capable 
of reformatting input data so that the. input format can be 
different from the output format. 

c. Verification and Correction 

(1) The system must provide key verification with 
keyboard lock and light on error. 

(2) Verification must be possible by selected 
fields within records. 

(3) It is desirable that verification by sampling 
be provided. 

(4) The device must permit correction by back- 
spacing and rekeying one character, one field, or one record, 
with changes to all control totals being an automatic function 
of the system. 

(5) The system must provide a means for handling 
uncorrectable errors. 

d. Validation 

(1) The system must provide a limit or range- 
checking capability for any field against a stored value. 

(2) The system must be capable of accumulating 
batch totals on any field or set of fields, comparing these 
totals at job end with control totals entered by the operator 

104 



from a source document, and giving verification if they do 
not agree. Under verification, a zero balancing feature 
must be provided. 

(3) The system must be capable of character 
validation by comparing entry fields with entries pre- 
recorded in a table or its equivalent. 

(4) The system must accumulate and display at 
job end a record count of the number of records entered or 
verified. 

(5) The system should provide for field checks 
and mandatory entry and completion fields. 

(6) It is desirable that the system also provide 
range, value and/or total validation on the number of fields, 
length of fields, cross-field dependencies, and/or sequence 
checking. 

(7) The system must provide some method of modulo 
check digit capability. 

e. System and Software 

(1) The system must operate all stations simul- 
taneously, using either the same or different program formats 
regardless of mode (entry or verify) . If one or more stations 
become inoperable, the other key stations must remain 
operational . 

(2) The system must be capable, via a super- 
visory console, of initiating and transferring key entry data 
stored in immediate access storage to magnetic tape, or vice 



105 



versa (turnaround) without interrupting or degrading the 
performance and fmictions being accomplished at any of the 
key stations. 

(3) The system must be capable of accommodating 
the interruption of a job at the end of a record within a 

.batch, begin work on another job (the same or different 
format) , and later resume keying on the former batch while 
maintaining all batch totals, production statistics, etc., 
separate . 

(4) The system must permit a second operator to 
take over a job at the end of a record within a batch and 
complete the job while maintaining separate production 
statistics on each operator. 

(5) All data transfers from or to main memory 
must be checked. 

(6) The system must provide the capability of 
dumping data onto a "save tape" periodically during the work 
day, and on re-entering this tape to allow recapture of data 
that would have been lost in the event of equipment malfunction. 

(7) The system must be able to control output tape 
blocking and header/trailer labels. 

(8) The system must be capable of ' reformatting 
input data to meet output specifications. 

(9) The system must be capable of locating a 

particular record using a 1 to 15 character search key and to 

have insertion/deletion capabilities with automatic control 

total and production statistic update. 

106 



(10) The system must provide the supervisor with 
status information by job and by batch on command, as follows: 

(a) Keying started, suspended, not completed, 
not being keyed, and completed. 

(b) Verifying started, suspended, not 
completed, not being verified, and completed. 

(c) Transfer to tape started, cancelled, or 
completed . 

(11) The supervisor must be capable of accomplish- 
ing, via the supervisory console, the following: 

(a) Interrogate job and batch status. 

(b) Load, add, delete or change program 
record formats. 

(c) Initiate batch transfer of completed 
data from immediate access storage to magnetic tape. 

(d) Establish jobs and/or batches. 

(e) Delete records from the immediate 
access storage. 

(f) Request display of production statistics. 

(g) Receive system error messages if the 
system is not performing properly, such as disk error, non- 
recoverable tape error, etc., on a display device (hard copy 
or CRT) . 

(h) Display all communications between the 
supervisor and the key entry system (hard copy or CRT) . 



107 



(i) Initiate tape entry operation of turn- 
around document processing. 

(12) The system must provide the following 
production statistics by shift, operator, and job on a 24- 
hour basis via transfer to tape on supervisor command: 

(a) Start date. 

(b) Start time and stop time (or elapsed time) . 

(c) Stop date. 

(d) Number of records. 

(e) Mode (data entry or data verify) . 

(f) Number of errors, corrections and retries. 

(g) Number of actual keystrokes. 

This concludes the listing of the requirements which should 
be considered when evaluating key-to-disk or drum systems. The 
following section reports on the experiences of some Navy 
installations and private companies that have utilized key-to- 
disk or drum equipment. Unfortunately, these experiences start 
with a system already selected and evaluate it against pre- 
viously used methods. Therefore, the experiences are 
(especially in the Naval Supply Center, Newport, evaluation) 
cost/benefit studies of a given representative system without 
comparison of detailed differences in characteristics and 
features as would be undertaken in selection of a new system. 
Although the studies lacked selection criteria, sufficient 
information was presented to compare the effectiveness of new 
key-to-disk or drum systems with previous methods. 



108 



B. NAVY EXPERIENCES 

32 

1 . N avy Supply Center, Newport , Evaluation 

a. General Information 

(1) Background . During the period December 1970 
to March 1971, the Naval Supply Center, Newport, Rhode Island, 
conducted an evaluation of a key- -'to- drum data entry system. 
The system evaluated was the Key Edit Model 100 manufactured 
by Consolidated Computer International, Inc., Toronto, 
Canada. The test involved comparison of the Key Edit system 
against conventional keypunch/verifier equipment and NCR-735 
key-to-tape equipment. The center had considerable experience 
with both types of machines. The systems were compared on 
the basis of difficulty and duration of operator retraining, 
operator productivity, accuracy of data preparation, system 
reliability, and overall system costs. 

(2) Physical Configuration . The key Edit Model 
100 is a computer controlled source data entry system in 
which data is entered through keyboards onto a magnetic drum 
storage unit. The data is subsequently transferred from the 
drum to a magnetic tape in logical batches for further pro- 
cessing on the main computer. 

The keyboards are similar to those used on 
keypunch/verif er machines and on stand-alone key-to-tape machines 



32 Condensed from Kittock, K. E., LCDR, SC , USN. , 
"Evaluation of Computer Controlled Source Data Entry Equip- 
ment: Final Report," Naval Supply Center, Newport, Rhode 
Island , April 1971, p. 1-45. 



109 



Each keyboard is capable of both entering and verifying data. 
NSC Newport has 12 keystations which replaced ten NCR-735's, 
three IBM 2 9's, and two IBM 059 's. The Key Edit system can 
handle from 8 to 32 keystations. 

Keystations are under the control of a mini- 
computer which provides time division multiplexing, i.e., 
time-sharing service, to each keyboard. The mini is a PDP-8 
with a 12K core memory which is controlled by an operating 
system provided by the vendor. External control of the 
system (communication to and from the supervisor) is via a 
console teletype unit. 

Intermediate storage capability is provided 
by a magnetic drum. Data is entered on the drum by the key- 
boards and is recalled from the drum by keyboards for 
verification. Drum layout is 128 tracks of seventy 8 0- 
character records each. Two tracks are required for program 
format storage and for portions of the operating system. Data 
capacity is therefore equal to 705,600 characters or 8820 
card images. Larger drums are available. 

Finished batches of input stored on the 
drum are transferred to magnetic tape by commands entered 
via the supervisor's console. The tape drive used is a 
7-track, 556 BPI unit. 

(3) Software and System Operation . The Key 
Edit system operates in an on-line and off-line mode. Data 
can be entered from all keyboards while the system is in the 



110 



on-line mode. All keyboards are locked out in the off-line 
mode. 

The operating system is resident in the PDP-8 
core memory while the system is operating in the on-line mode. 
It is loaded from the tape drive after a bootstrap loader is 
entered through the supervisor's cpn.so.le . 

The operating system permits each operator 
to enter or verify data at electronic speed. As time-shared 
keyboards are substantially faster than the operator, she 
has the illusion of being on-line to the computer at all times. 
Program formats are entered onto the drum through the key- 
board designated as logical keyboard 1. A maximum of 63 
program formats can be stored; program formats are available 
to any keyboard by depressing the appropriate function key. 
A batch is identified by four alphanumeric characters. 
Batches may be opened, verified, and closed at any keyboard. 

The operating system is constantly monitoring 
the status of the drum. The supervisor receives a warning on 
the supervisory console when the drum load reaches 94 tracks 
(32 tracks remaining) . The warning is then repeated every 
four tracks. The operating system permits the supervisor to 
enter commands through the console to control key entry 
operations. 

The only function which must be performed 
off-line (with keyboards inoperative) is dumping and restoring 
the drum. A drum dump is taken to preserve on magnetic tape 



111 



the entire contents of the drum. This is a security feature 
which is employed to prevent the loss of source data entry 
work in the event of CPU or drum failure. It also ensures 
that a second copy of the data is available after a given 
batch has been released from the drum. The tape obtained 
from a drum dump is uniquely eude d aaad not useful for sub- 
sequent processing. In the event this data is subsequently 
desired, it must be reloaded to the drum and then transferred 
to tape. Ten to fifteen minutes are required to dump a fully- 
loaded drum. NSC Newport is currently taking two drum dumps 
per day. The first dump is taken during the lunch hour, and 
the second is taken after the close of business. This 
schedule ensures that there is no loss of operator production 
manhours while the system is off-line, 
b. Test Description 

(1) Source Data Applications . The source 
documents employed in this evaluation are used in the Afloat 
Consumption Cost and Effectiveness Surveillance System 
(ACCESS) and the CSMP sub-system of the 3M system. The mix 
of source data employed in this evaluation is representative 
of the source data found in business-oriented data processing 
installations. These applications require alpha, numeric, 
and alphanumeric source data entry. They all require dup- 
lication of certain fields/characters, and some require left 
zero fill. Two of the primary source documents are the E&R 
and AR formats (NAVSUP 1250) which are conventional 80-column 

layouts . 

112 



(2) O perator and Supervisor Profiles . The 
operators selected for training on the Key Edit equipment 
are representative of the operators employed as NSC Newport. 
The profile of these operators is shown in Table XX. Nine 
of the ten operators had experience on the NCR-735 (employee 
t'3532 is the operator who does not have such experience). 
However, employees #3385, #3532, and #3514 had been using 
029/059 equipment for six months or more prior to the 
commencement of the Key Edit evaluation, while the other 
seven operators had been using NCR-735 key-to-tape units for 
six months or more prior to the commencement of the study. 
One of the supervisors was experienced in the operation of 
029/059 and 735 equipment and the other had only IBM 
experience. 

(3) Productivity Measurement . NSC Newport 
utilizes the Management Utilization and Control Standards 
Program, or MUACS, that was explained in Chapter VI, para- 
graph F. The production efficiency statistics based on six 
months 1 experience were available for the operators identified 
in the study. The approach employed by the study was to 
maintain the MUACS standard constant and observe any changes 

in individual production effectiveness that could be attributed 
to the new hardware . 

(4) Reliability . The reliability of the Key 

Edit equipment was closely monitored throughout the evaluation. 
There are two general types of malfunctions which can occur 

113 



with computer-controlled source data entry equipment. The 
first type of malfunction involves only an individual key- 
board. This type of malfunction occurred only once during 
the evaluation and is not considered significant. The second 
type is a malfunction in the central control unit. This type 
of failure is extiemely critical because all operators arc 
idle until repairs are effected. 

The criterion for reliability was set out in 
the GSA contract with Consolidated Computer International, 
Inc., which stated: "All equipment furnished under this 
contract shall perform the function for which it is intended 
in accordance with the manufacturer ' s specifications and 

other representations at an average effectiveness level of 

33 

90%." 

(5) Operator Accuracy . The error rates of all 
keypunch operators are recorded and maintained by the data 
processing department under the Zero Defects Program. Con- 
sequently, a six-month mean error rate was available for each 
operator for the period prior to the test. This rate was to 
be compared with error rates recorded for the same operators 
using the Key Edit equipment during the test, 
c. Test Results 

(1) Training . Operator training consisted of 
four hours of individual keyboard instruction provided by 



33 GSA Contract #GS-00S-84492 , 1 July 1970 to June 1971. 



114 



the vendor. This was augmented by periods of on-the-job 
training. It was determined that six to ten hours of this 
training were required for operators having recent key-to-tape 
experience and 12 to 16 hours were required for those operators 
with recent 029/059 experience. At the conclusion of the 
formal instruction and on-the-job training, the operators 
were capable of producing at a production and error rate 
acceptable to the data processing management of NSC Newport. 
Supervisors were trained in both keyboard (4 hours formal and 
16 OJT) and system (8 hours formal and 12 OJT) operation. 
Management had been concerned about the ability of former key- 
punch supervisors to operate the mini-computer, but neither 
supervisor had any difficulty in mastering all control functions 
required. In summary, no significant problems were encountered 
in training either operating or supervisory personnel to handle 
the new equipment. 

(2) Productivity . Table XXI and XXII show the 
production learning curve and data for the seven operators with 
recent NCR-735 experience. About one month was required for 
them to regain their previous mean production efficiency. 
From that point, productivity continued to rise over the 
remainder of the test period ending with a 12.2% mean pro- 
duction increase. Table XXIII shows the production learning 
curve for operators with recent 029/059 experience. About 
two months were required by these operators to regain their 
previous level of efficiency. Their production continued to 



115 



increase sharply after that point, ending the test period 
at a 27% higher rate. It should be noted that the curve 
was still trending upward, so 27% is a conservative esti- 
mate of the 029/059 operator productivity increase. Table 
XXIV compares the productivity of individual operators 
previously using 022/05 9 equipment. 

(3) System Reliability . System reliability 
during the test period is summarized by Table XXV. As is 
shown, the percentage of "up" time averaged 95%, well within 
the 90% specified in the GSA contract. The overall re- 
liability and performance of the Key Edit equipment was found 
to be highly satisfactory. 

(4) Operator Accuracy . Tables XXVI and XXVII 
specify the error percentages achieved during the test by 
previous NCR-735 and 029/059 operators respectively. Both 
groups showed initial increases in errors, but as they gained 
proficiency with the Key Edit equipment, error rates were 
reduced below pre-test levels. A substantial portion of the 
increased accuracy experienced was attributed to the capability 
of the Key Edit equipment to display the last character 
entered/verified directly. The NCR units displayed a binary 
pattern which required translation by the operator. There 

is, however, no current agreement among data processing 
personnel regarding display of records. Some argue to 
display the entire record and others argue that the display 



116 



of the entire record detracts the operator's attention and 

34 
degrades performance. 

(5) Cost Analysis . The method used in LCDR 
Kittock ' s study was to reduce all costs associated with the 
Key Edit, NCR-735, and 029/059 equipment to an individual 
keyboard/worker basis. The volume of work that can be 
accomplished by one average operator with one keyboard during 
a given period of time is based on the productivity results 
already given and can be expressed by the following 
relationships : 

1.27 029/059 keyboards equal one Key Edit keyboard, 
1.12 NCR-735 keyboards equal one Key Edit keyboard. 
It was necessary to reduce the 029/059 keyboards to a composite 
keyboard since two separate keyboards are required to punch 
and to verify a given volume of work. Experience at NSC 
Newport indicates that the 029 keypunch is required 
approximately 60% of the time and the 059 keyverifier is re- 
quired approximately 40% of the time for a given volume of 
work. 

The full range of operating costs for four 
data entry systems are shown in Table XXVIII. A detailed 
description of the cost analysis is presented in Table XXIX. 
All equipment rental and labor costs have been equated to 
the productivity levels previously mentioned; therefore, the 



34 EDP ANALYZER, Vol 9, No. 9, September 1971. 



117 



costs represent identical volumes of work for each system. 
It should be noted that the significant costs associated 
with the Key Edit system are the equipment rental, operators' 
salaries, and fringe benefits. The Key Edit system is cost 
effective, even if all other costs are excluded from the 
analysis . 

(6) Comments on the Newport Study . One major 
shortcoming of the NSC Newport evaluation is that all changes 
in productivity were attributed to the new machinery. 
Certainly the Hawthorne studies and the findings of the many 
behavioral scientists discussed in Chapter IV have shown 
that worker productivity is not solely a function of hardware 
capabilities. Some attempt should have been made to evaluate 
the selected workers * attitudes before starting and before 
ending the test. Additionally, a control group, subjected 
to the same management attention while performing the same 
tasks on the old machinery, should have been used in com- 
parison to the results of the test group in order to attempt 
to isolate the productivity increases that could be attributed 
to the new hardware . 

2 . Naval Supply Center, Oakland, Study 

In June 1971, the Naval Supply Center, Oakland, re- 
quested from the Naval Supply Systems Command, installation 
of a key-to-disk data entry system for processing of all 
applications in support of tape-oriented computer systems. 
Their previous equipment was all of the 029/059 variety. 

118 



They offered as justification: projected increases in 
productivity, lower costs, and enhanced data entry pro- 
cedures. They did not wish complete replacement of keypunch/ 
keyverify equipment due to certain applications which utilized 
an IBM 3 6 0/2 card-oriented computer. 

The part of their operation recommended for con- 
version was composed of 16 procedures or formats with a 
monthly average of 600,000 records. This eligible group was 
divided into three categories of data entry effort, each 
requiring a different mode of operation in a key-disk 
environment. Group one consisted of typical keypunch pro- 
cedures that could be entered normally into a key-disk 
system. Group two involved input that required batch- 
balancing to an accompanying adding machine tape. Group 
three, the most unique category, was composed of Supply 
Operations Assistance Program (SOAP) documents. Data was 
received in the form of prepunched cards that required 
alteration of some data and/or addition of new data. 

NSC Oakland listed three major requirements and 
three desirable features for a key-disk system that would 
handle their applications. The major requirements were: 
the ability to accommodate the SOAP application in a cost- 
effective manner when compared to keypunch/keyverify systems, 
the ability to accumulate batch totals when processing fiscal 
data, and an intermediate storage capacity of 39,000 80- 
character records. The last requirement was quantified as 

119 



the result of a five-month study involving data entry re- 
quirements both in number and timing, and the costs associated 
with various amounts of storage. The three desirable features 
mentioned were: a dual system configuration, removable disk 
packs for intermediate storage, and a separate supervisory 
console. The dual system configuration (two 7-keystation 
systems instead of one 14-keystation system) was requested in 
order to provide additional flexibility by allowing various 
cross-connection schemes and to provide a hedge against the 
risk of processor or disk failure. Interestingly, two seven- 
station CMC-5 systems had a lower rental than one CMC -7 system 
with fourteen stations. A separate supervisory console for 
each system was desired because of the large number of formats 
and batches involved in each day's processing. Systems with- 
out separate consoles must be queried or directed through one 
of the keystations, thereby causing it to be totally pre- 
empted from production in Oakland's case. The removable disk 
pack feature was requested in order to gain flexibility in 
times of processor or equipment malfunction, or when high 
priority work overrides occur. 

The cost-saving proposal submitted' by NSC Oakland was 
based on a projected 25% increase in data entry activity. A 
revised proposal submitted in 1972 predicted yearly savings 
of $59,34 for the CMC equipment. Primary savings components 
were in hardware (26 IBM 029/059 machines replaced by a 14- 
keystation system) , and in personnel (six fewer operators 

required) . 

120 



3 . Naval Supply Systems Command Current Procurement 

Almost two years ago the Naval Supply Centers began 
requesting in earnest for key-to-disk or drum hardware. The 
results of the Newport study had become known, and interesting 

tales of significant gains were being reported in the trade 

35 
journals. The N'aval Supply Systems Command in Washington, 

D. C, honored the request of NSC Oakland, but held the others 
in abeyance until a consolidated request could be drawn and 
the results of Newport and Oakland studied in greater detail. 

A solicitation of proposals is currently being pre- 
pared for issue in September 1972. On the basis of this 
solicitation, a single hardware manufacturer will be selected 
and hardware installed at all tidewater supply centers and 
inventory control points. In the interim, permission has 
been granted to the west coast tidewater supply centers to 
install CMC-7 systems. 

C. CIVILIAN CORPORATE EXPERIENCES 
1 . Bonus Gifts Incorporated 

Bonus Gifts, Incorporated is a firm involved in the 
redemption of coupons carried on some 500 grocery products. 

Their old system involved twelve IBM 2260 CRT terminals 
on line to an IBM 360/50. They decided to install a Redcor 



35 See DATAMATION , June 1970. 

36 EDP ANALYZER, Vol. 9, No. 10, October 1971, p. 1. 



121 



Key Logic key-to-disk system with ten stations. The main 
reason for the change was a desire for an offline system 
independent of CPU availability. They also hoped for in- 
creased accuracy due to the Key Logic's edit capabilities. 

The results of the conversion were impressive. In 
the first six months of operation, average operator pro- 
ductivity increased 25%. Operator requirements decreased 
from 8 to 10 full-time people to 6 to 8, and average pro- 
ductivity went from between 12,000 and 15,000 average key- 
strokes per hour to between 15,000 and 18,000. The error 
rate fell from over 5% to about 1/2%. 

The Key Logic processor has been programmed to perform 
a number of validity checks. It rejects alpha characters in 
designated numeric fields. It checks to see if a field 
value is one of a specified set or within a pre-determined 
range. It also performs check digit validation and control 
total balancing. Because of these automatic validation 
capabilities, Bonus Gifts has found that key verification is 
required on only one field of each record type. 
2 . Xerox Data Systems 

Xerox Data Systems is the computer manufacturing 
division of Xerox Corporation. The company set three goals to 
be met by a new data entry system: 

a. Higher productivity per operator, 



37 Ibid., p. 2. 



122 



b. Ability to ha:idle an increasing workload and at 
a reduced data conversion cycle time, and 

c. Easy retraining requirements. 

They selected a CMC- 9 Key Processing System because they were 
able to contact six users of the system, all of whom were 
pleased with it, because the system provided a large 7 1/4 
million character) disk storage, and because other users' 
experience indicated a retraining time of about two days was 
required to make operators productive. They ordered a system 
having 15 keystations and one supervisor station to replace 
17 keypunches and verifiers. They would have had to add more 
keypunches and hire more operators due to the increasing 
workload had they not converted to the CMC- 9. In an eight- 
month period, the system was down twice - once for twenty 
minutes and once for an hour. Their error rate went from 2% 
to below 1%, some weeks being virtually error free. A pro- 
ductivity increase of 24% for an average operator on an 
average job was realized. They have experienced 25% to 4 0% 
less turnover of operators leaving with no reason. 

•3 O 

3 . Columbia Broadcasting System 

A regional data processing center of the Columbia 
Broadcasting System in Hollywood, California, recently 
replaced a two-site operation totaling nine keypunches and 
six verifiers with a six-station Inforex system at a single 
location. Their operator requirements were reduced from ten 



38 Ibid. , p. 4 



123 



to eight. Input equipment rental costs were reduced by 10% 
and both floor space and supply costs went down. Production 
rates went from an average of 10,000 keystrokes per hour to 
13,000. CBS is planning to do batch proofing and file main- 
tenance on the system to reduce main computer time. 
4. Blue Cross 39 



A much larger operation was converted at Blue Cross 
of Southern California. They converted from an NCR-735 key- 
to-tape system to a 60- station CMC-9 key-to-disk operation. 
One of the biggest advantages to Blue Cross involved the 
limited verification feature. They redesigned their record 
formats incorporating some of up to 480 characters which 
greatly simplified procedures. With the Key Processing system, 
any individual field may be selected for verification. They 
recorded productivity increases of 15% to 2 0% over the tape 
units. Although keying speeds remained about constant, re- 
duced time in tape handling and program loading accounted for 
the increased productivity. Elimination of pooling needed 
for consolidation of like records for submission to the 
computer equipment resulted in $2500 per month savings and 
10% savings on other hardware. Operator requirements were 
lowered by five, and it is anticipated that fewer operators 
and supervisors will be required to handle an increasing 
workload. Retraining times for operators was one day, and 



O Q 

Landon, J. R. , "Data Preparation at Blue Cross," 
DATAMATION, June, 1970, p. 91-92. 



124 



they returned to previous output levels in one to one and 
one-half days as opposed to the one month time period re- 
quired by such operators at NSC Newport. A 9 8.3% hardware 
reliability has been recorded. 

D. CONCLUSIONS 

The requirements of individual installations vary de- 
pending on the type of data being entered and the peripheral 
hardware on the installations' computers. These influences 
must be considered in any selection process. Keypunch/ 
keyverify equipment or buffered card equipment is most effi- 
cient if the volume is low, cards are required, and/or 
operators are decentralized. Key-to-tape may be preferred 
in such an environment if the volume is higher or if variable 
record lengths are required. Key-to-disk or drum is most 
efficient in high volume, batch-entry operations where the 
data entry process is centralized. If a few jobs remain 
that require cards, a cost analysis should be performed to 
determine if it would be less expensive to retain standard 
punch/verify machines, to utilize key-to-tape or key-to-disk 
or drum equipment and have the main computer punch the 
required cards, or to obtain an optional card punch unit for 
use with a key-to-disk or drum system. The peripheral hard- 
ware of the CPU must also be investigated to ensure that it 
will accept the entry unit output without intermediate 
modifications. A comparison of various available entry 
hardware is presented in Table XXX. 

125 



One major advantage of key-to-disk or drum hardware that 
has not been fully developed is the potential of the equip- 
ment to restructure the workload by performing data validation. 
The power of the mini-computer to perform operations such as 
table look-up, range checking, field continuity, cross 
referencing, etc. offers to diita processing management the 
ability to shift these time-consuming tasks from the expensive, 
over-burdened main frame. 

It appears that shared processor keyboard data entry 
systems are a cost-effective possibility for many data 
processing installations. With the use of this equipment in 
these installations, the result should be an increase in the 
marginal physical product of keypunch machinery. 



126 



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TABLE XIX 



TYPICAL SYSTEM CONFIGURATION 



127 



TABLE XX 



PROFILE OF OPERATORS ASSIGNED TO KEY EDIT EVALUATION 



PREVIOUS EXPERIENCE (YRS ) MOST RECENT 
02 9/0 i g NCR 73 5 EXPERIENCE^ 

1.0 

0.3 

3.0 

1.5 

2.5 

2.0 

1.0 

0.5 

1.75 

4.25 



MEAN 24 1.78 1.25 



EMP. 




NO. 


AGE 


2531 


24 


3333 


28 


3279 


23 


3520 


22 


3328 


41 


3383 


21 


2950 


20 


3385 


21 


3532 


19 


3514 


22 



3.5 


NCR 735 


2.5 


NCR 7 35 


1.0 


NCR 735 


0.25 


NCR 735 


1.0 


NCR 73 5 


1.5 


NCR 735 


1.0 


NCR 73 5 


1.5 


029/059 


-0- 


029/059 


0.25 


029/059 



12 8 



TABLE XXI 



PRODUCTION LEARNING CURVE 



OPERATORS PREVIOUSLY USING NCR 735 EQUIPMENT 



130 



120 



110 



100 



90 



80 



Production Efficiency 

Achieved with NCR 735 
Key-to-tape Units 



-H h- 

DEC JAN 



130 



120 



110 



100 



90 



80 



FEB MAR 



129 



TABLE XXII 



PRODUCTIVITY OF OPERATORS PREVIOUSLY USING NCR 735 





NCR 735 MEAN 


KEY EDIT 


MEAN 


% INCREASE 


EMP. NO. 


1/PROD. EFF. 


2 /PROD. EFF. 


(DECREASE) 


2950 


102.8 


122.4 




19.0 


3520 


75.7 


91.8 




21.2 


3383 


98.9 


106.5 




7.6 


2531 


107.0 


106.8 




0.0 


3333 


88.1 


105.1 




19.2 


3328 


99.8 


109.5 




9.7 


3279 


91.0 


101.9 




11.9 



MEAN 



94.6 



106.2 



12.2 



1/ BASED ON MAY-OCT 197 PRODUCTION RECORD 
2/ BASED ON FEB-MAR 1971 PRODUCTION RECORD 



130 



TABLE XXIII 



PRODUCTION LEARNING CURVE 



OPERATORS PREVIOUSLY USING 029/059 EQUIPMENT 



130 



120 



110 



100 



90 



80 



DEC 



Production Efficiency 



mm -»— — a. _•»__«&. ~. mm ~m -m m- — -. -m> mmmm — -,.— — ^ 



Achieved with 029 
Keypunch/059 Key- 
verifier 



JAN FEB 



MAR 



130 



120 



110 



100 



90 



80 



131 



TABLE XXIV 



PRODUCTIVITY OF OPERATORS PREVIOUSLY USING 029/059 







029/059 MEAN 


KEY EDIT 


MEAN 


% INCREASE 


EMP . 


NO. 


1/PROD. EFF. 


2 /PROD . EFF . 


(DECREASE) 


3814 




108.7 


129.1 




18.7 


3385 




83.1 


108.3 




30.3 


3532 




82.9 


113.3 




36.6 



MEAN 92.0 116.9 27.0 

1/ BASED ON MAY --OCT 19 7 PRODUCTION RECORD 
2/ BASED ON FEB-MAR 1971 PRODUCTION RECORD 



13: 



TABLE XXV 



SYSTEM RELIABILITY 





SCHEDULED 


PRODUCTIVE 


DOWNTIME 


% EFFEC- 


MON 


HOURS* 


HOURS 


HOURS 
9.0 


TIVENESS 


DEC 


187.0 


178.0 


95.2 


JAN 


170.0 


156.7 


13.3 


92.1 


FEB 


161.5 


152.5 


9.0 


94.4 


MAR 


195.5 


190.5 


5.0 


97.5 



AVG. 



178.5 



169.4 



9.1 



94.8 



*The scheduled hours are based on a system availability of 
8.5 hours a day, 5 days a week. 



133 



TABLE XXVI 



ERROR RATES 







(PEP 


CENT) 










OPERATORS PREVIOUSLY USI 


735 




EMP. 


1/NCR 73 5 






KEY 


EDIT EQUIPMENT 


NO. 


(6 MO MEAN) 




DEC 


JAN 


FEB 


MAR 


2950 


0.7 




1.2 


1.0 


0.6 


0.7 


3520 


1.7 




3.3 


2.8 


2.0 


1.6 


3383 


2.1 




3.0 


2.5 


1.7 


1.3 


2531 


2.4 




3.9 


2.2 


1.6 


2.0 


3333 


1.5 




2.3 


2.1 


1.4 


1.2 


3328 


1.6 




2.3 


1.9 


1.3 


1.2 


3279 


2.0 




1.9 


1.9 


1.6 


1.3 



MEAN 1.6 2.6 2.1 1.5 1.3 



1/ MEAN BASED -ON MAY-OCT 1970 ERROR RATES 



134 



TABLE XXVII 



ERROR RATES 



(PERCENT) 
OPERATORS PREVIOUSLY USING 029/059 KEY ENTRY UNITS 



EMP. 
NO. 



3514 
3385 
3532 



029/059 




KEY EDIT 


EQUIPMENT 


(6 MO MEAN) 


DEC 


JAN 


FEB MAR 


1.7 


3.1 


1.6 


1.6 1.5 


2.0 


2.8 


2.4 


1.8 1.6 


6.4 


5.4 


3.7 


2.8 2.1 



MEAN 3.4 3.8 2.6 2.1 1.7 



135 



TABLE XXVIII 



OPERATING COST PER KEYBOARD PER MONTH 



$739 



029/059 NCR 73 5 

EQUIPMENT RENTAL $110 $171 

SALARY GS-3/1 584 516 

FRINGE 10% 58 52 

SUB-TOTAL $7 52 

PUNCH CARDS $ 24 

CARD SALVAGE (4) 

CARD TO TAPE 12 

EDITING/POOLING 
AT 200 BPI $ 37 

EDITING AT 556 BPI 

CONTROL UNIT DOWNTIME 

SUBTOTAL 

TOTAL 



1/KEY EDIT 2/KEY EDIT 
12 KB 2 KB 



$153 

460 

46 



$659 



$114 

460 

46 



$620 







$ 


4 
25 
$ 29 


$ 4 
25 


$ 32 


$ 37 


$ 29 


$784 


$776 




$688 


$649 



1/ KEY EDIT SYSTEM 100/100 WITH 716,8 00 CHARACTER DRUM 
(CURRENT INSTALLATION) 

2/ KEY EDIT SYSTEM 100/85 WITH 1,427,600 CHARACTER DRUM 



136 



TABLE XXIX 



FORMULATION OF MONTHLY OPERATING COSTS 



1. 029/059 



a. Equipment Rental 

For a given volume of v;ork , the 029 is required 60% 

of the time and the 059 is required 40% of the time. 

Cost of composite 029/059 keyboard is 0.6 x 85 + 0.4 x 

89 = $86.60. Cost of composite keyboard adjusted to 

Key Edit productivity (throughput) level is $86.60 x 

1.27 - $109.98. 

NOTE: IBM charges extra shift rental on this equip- 
ment. This increases the cost by 10% of l/176th 
of the basic monthly rental for each hour over 176 
hours that the average machine is used during the 
month. 

b. Salary 

GS-3/1 at $460 per month adjusted to Key Edit pro- 
ductivity (throughput) level is $460 x 1.27 = $584.20. 

c . Fringe Benefits 

10% Fringe is .10 x $584.20 = $58.42. 

d. Punch Cards 

Mean cards punched/verified per keyboard (based on 
March 1970 production) is 24,200. Mean cost per 1000 
cards is $1.00. Punch card cost is 24.2 x $1.00 = 
$24.20. 



137 



" TABLE XXIX (CONT) 

e v . Card Salvage 

Card salvage value is $.04 per pound, 24,200 cards 

weigh 9 6.8 pounds. 

Card salvage is 96.8 x $.04 = $3.87. 
f . Card-to-Tape Cost 

Effective card read speed is 450 cards per minute. 

Time required to read cards produced by one 029/059 

keyboard is 24/200 = 54 minutes. 
450 

Out-of-pocket costs associated with government-owned 
14 01 components required for card- to-type operation 

is $13.50 per hour. 

54 
Card-to-tape cost is — — x $13.50 - $12.15. 

NOTE: These costs may not be valid if cards are 

input directly to the main computer. However, except 

in the case of very low volume, the main CPU time 

would be more costly than card-to-tape conversion. 

2. NCR 735 

a . Equipment Rental 

Keyboard rental is $152. 

Cost of keyboard adjusted to Key Edit productivity 

(throughput) level is $152 x 1.122 = $170.54. 

NOTE: There is no extra shift rental for this 

equipment. 



138 



TABLE XXIX (CONT) 

b. Salary 

GS-3/1 at $460 per month adjusted to Key Edit 
productivity (throughput) level is $460 x 1.122 
$516.12. 

c . Fringe Benefits 

10% Fringe is .10 x $516 = $51.60. 

d. Editing/Pooling at 200 BPI 

UNIVAC 1500 cost is $14.75 per hour. 
1.75 hours required for pooling. 
0.75 hours required for editing. 
Editing/Pooling cost is 2.50 x $14.75 = $36.87. 
3 . Key Edit 12-Keyboard Configuration 

a. Equipment Rental 

Monthly rental for Key Edit 100/100 system with 

716,800 character drum is $1840. 

Keyboard unit cost is $l84 ° = $153.33. 

12 
NOTE: There is no extra shift rental for this 

equipment. 

b. Salary 

GS-3/1 is $460 per month. 

c . Fringe Benefits 

10% Fringe is .10 x $460 - $46.00. 



139 



TABLE XXIX (CONT) 

d. Editing at 556 BPI 

UNIVAC 1500 cost is $14.75 per hour. 
0.25 hours required for editing. 
Editing cost is 0.25 x $14.75 = $3.69. 

e. Control Unit Downtime 

$2.7 per operator/hour x 9.1 hours/mo. = $25.00. 
4 . Key Edit 20-Keyboard Configuration 

a . Equipment Rental 

Monthly rental for Key Edit 100/85 system with 

1,427,600 character drum is $2280. 

$ 2 2 8 
Keyboard unit cost is = $114. 

NOTE: There is no extra shift rental for this 

equipment. 

b. Salary 

GS-3/1 is $460 per month. 

c. Fringe Benefits 

10% Fringe is .10 x $460 = $46.00. 

d. Editing at 556 BPI 

UNIVAC 1500 cost is $14.75 per hour. 
0.25 hours are required for editing. 
Editing cost is 0.25 x $14.75 - $3.69. 

e. Control Unit Downtime 

$2.70 per operator/hour x 9.1 hours/month = $25.00 



140 





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COMPARATIVE TABLE OF KEY-TO-DISK SYSTEMS 



TABLE XXX 



141 





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COMPARATIVE TABLE OF KEY-TO-DISK SYSTEMS 

TABLE XXX 



142 



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COMPARATIVE TABLE OF KEY-TO-DISK SYSTEMS 



TABLE XXX 



143 









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COMPARATIVE TABLE OF KEY TO DISK SYSTEMS 

TABLE XXX 



144 



VIII. COST ANALYSIS 

The recommendations of the previous chapters will yield 
benefits in increased productivity in terms of increased 
marginal physical product of labor and machinery, but re- 
calling from Chapter I : 

Price Per Unit of Labor 
Marginal Cost = Marginal Physical Product of Labor 

If the price per unit of labor (or machinery) increases 
proportionally with the increase in marginal physical product, 
no cost saving will result. One objective, therefore, should 
be to restrain the increase in the price per unit of labor 
(or machinery) so that it is proportionately less than the 
increase in marginal physical product of labor (or machinery) . 
Even though there are many variables that are installation 
dependent, such as the savings generated by reducing the 
error rate on procedure XXX from 3% to 1%, major machine cost 
elements can be identified and projected based on previous 
experience with various hardware configurations. Additionally, 
if the probability of a worker falling below or exceeding the 
average installation productivity level is normally distributed 
about the average production level of the installation, the 
cost behavior of the proposed incentive plan can be developed. 

Greenblatt (1972) , in a comparative analysis of various 
types of keyboard entry systems, offers a projection of labor 
costs and equipment costs that are shown in Table XXXI and 
XXXII. While it may be argued that wages vary from one 



145 



TABLE XXXI 



DATA ENTRY LABOR COSTS 



30 



25 



20 .. 



15 

Thousands 
of Dollars 



10 •- 



5 -• 



029 



buffered 
punch 

keytape 



Keydisk 
(no CRT) 




Source 



10 20 30 
Equivalent number of keypunches 

Greenblatt, S. , "Delete Delays and Dollars with Direct 
Data Entry," INFOSYSTEMS , September, 1972, p. 21. 



146 



TABLE XXXII 



MONTHLY EQUIPMENT COSTS 




keytape 

buffered 
punch 



clustered 
keydisk 



029/059 



Source: Greenblatt, S., "Delete Delays and Dollars with Direct 
Data Entry," INFOSYSTEMS, September, 1972, p. 21. 



147 



geographical area to another, what is important to observe in 
Table XXXI is not the slopes of the cost lines, but, rather, 
the slopes in proportion to each other. The relation of the 
slopes is due to observed productivity (throughput) differences 
in the machines. The cost lines presented in Table XXXII, 
however, are subject to individual fluctuations as equipment 
manufacturers modify their prices. Currently, key-to-disk 
or drum systems first become economically competitive with 
key-to-tape and buffered punches at about 6 machines. It 
should be noted, however, that Greenblatt's (197 2) costs are 
average costs, and that because of the wide range in prices 
for key-to-disk hardware, many systems are available that 
have an economic advantage such as was discussed in the NSC 
Newport study in Chapter VII and Tables XXVIII and XXIX. 

The average level of productivity is represented by the 
formula in Table VIII which determines an average for a 
particular job on the basis of the predetermined Procedure 
Time Model and observed production. Assuming that operator 
productivity on any one job is distributed about a mean 
productivity level that is approximated by the calculated 
average, the installation's productivity on the total 
population of jobs can be shown via the Central Limit Theorem 
to be normally distributed about the mean or average pro- 
ductivity level of the installation. This distribution is 
shown in Table XXXIII in several forms to indicate the effect 
the variance has on the shape of the distribution. The 

148 



TABLE XXXIII 



DISTRIBUTION OF PRODUCTION EFFICIENCY 




mean 




performance 


A 


100% 


115% 



149 



variance is a measure of the frequency and distance individual 
performances fall from the average. If there is a great 
difference between the individual performances of the 
installation's operators, the distribution will be flat and 
spread out. If the individual operators are very similar in 
their performance, the distribution will be tall and thin. 
If the average represents a 100% production efficiency level 
and point A in Table XXXIII represents 115% production 
efficiency, the probability of an operator performing at 115% 
or more may be considered as being represented by the shaded 
area under the curve. In the tall curve this area is small 
and thus the probability is small. In the flat curve the area 
is larger and the probability is larger. The spread of 
operator performance can not be predicted in this thesis 
because no actual keypunch installation is being considered; 
since the spread of operator performance determines the 
probability of an operator exceeding the average productivity 
level of the installation, no actual system cost can be 
derived at this time. 

■ One other major factor in the probability of an operator 
receiving an incentive reward is the placement by management 
of the Incentive Base described in Chapter VI and shown in 
Table XVI. If the incentive base is set at 100%, as shown 
by point B in Table XXXIV (a), then the probability of an 
operator performing at 100% production efficiency or more is 
50%. If the incentive base is set at 90%, represented by 

150 



TABLE XXXIV 



EFFECT OF THE INCENTIVE BASE 




B 
100% 




151 



point C in Table XXXIV (b) , and if 90% is one standard 
deviation from 100%, the probability of an operator performing 
at 90% or more and earning an incentive award is 84%. As 
the probability of an operator earning an incentive reward 
increases, more operators will earn more money causing an 
increase in the price per unit of labor and a decrease in 
the overall cost savings. 

In summary, the goal is to proportionally increase the 
marginal physical product of labor and machinery more than 
their respective unit costs. No exact dollar costs can be 
derived at this time since no specific keypunch installation 
is being considered. Given a specific installation, a cost 
analysis could be performed based on hardware replacement, 
environmental improvements required, and a measure of the 
variance in operator production ability. 



152 



IX. CONCLUSION 

The responsibility for civilian incentive plans within 
the Navy has been assigned to the Director of Civilian Man- 
power Management. The Director is authorized to establish 
the policies and standards concerning incentive awards and 
to grant approval to exception requests. He has assigned 
the responsibility and authority for incentive award pro- 
motion and administration to the Head of the Motivation and 
Incentives Branch, Office of Civilian Manpower Management. 

The purpose of the civilian incentive program is, first, 
"to encourage employees to participate in improving the 
efficiency and economy of Government operations," second, 
"to recognize and reward employees, individually or in groups, 
for their suggestions, inventions, superior accomplishments, 
or other improvement in Government operations," and, third, 
"to recognize and reward employees, individually or in groups, 
who perform special acts or services in the public interest 
in connection with, or related to, their employment." The 
incentive plan offered by this thesis is intended to recognize 
and reward the individual keypunch employee for her superior 
accomplishment in Government operations. Specifically, the 
incentive will be granted on the basis of individual per- 
formance contribution that meets the Government established 



Federal Personnel Manual, Chapter 451, Paragraph 1.2. 



153 



standards of: "performance of assigned duties, with special 
effort or special innovation, that results in significant 
economies or other highly desirable benefits," or "performance 

of assigned tasks so that one or more important job require- 

41 
ments is significantly exceeded." 

The value of the awards presently authorized for contri- 
butions of a performance nature range from $100 to $150 per 
year for employees in the keypunch grade levels. For contri- 
butions of a one-time beneficial suggestion nature, the award 
is in the range of 10% of the anticipated annual savings that 
would result from implementation of the suggestion. The 
incentive award offered by this thesis is based on a per- 
centage of the savings generated by the measured and documented 
increased productivity of the keypunch operator. The actual 
percentage used can be adjusted to permit competitive 
bidding for labor hours in the labor markets of various 
geographical areas. 

The government incentive plan urges "prompt action on 
contributions to encourage maximum employee participation and 
obtain all possible benefits to the Government." The period 
of measurement of the incentive plan offered by this thesis 
coincides with the two-week pay period for federal civilian 
employees. The incentive award is paid in the paycheck 



41 

Ibid . , Paragraph 3 . 2c . 3 and 4 

42 

Ibid., Paragraph 2.4. 



154 



immediately following the period of measurement on the premise 
that any greater separation will disorient the payment from 
the effort that earned the award. 

Unlike financial incentive rewards, improvements in the 
physical environment of the workspace may not foster an in- 
crease in worker productivity, but they may ensure that work- 
ing conditions do not inhibit the motivational and technological 
recommendations of this thesis. Workspace improvements provide 
a relatively inexpensive method for data processing management 
to initially solicit operator participation in what happens 
in the keypunch installation. The experience of Naval Supply 
Center, Long Beach, California, was that when the keypunch 
operators v/ere invited to participate in decisions regarding 
workspace improvements, their reaction was enthusiastic and 
they readily adopted the general conservative guidelines 
suggested by data processing management. 

Improvements in the marginal physical product of machinery 
may be possible through evaluation of the installation's pro- 
duction load, degree of centralization, and output requirements 
with the object of selecting the appropriate hardware to match 
the workload. Many installations are finding that the new 
key-to-disk and drum configurations are providing significant 
throughput increases and error rate reductions. As the 
capabilities of the on-line mini-computer are expanded 
through software development to utilize the optional card 
punches and printers that some manufacturers now offer, this 

155 



equipment may replace much of the background punch-sort- 
validate-print-return processing that now requires main 
frame or slave computer time. 

Additional gains in productivity can be made by ex- 
panding the role of the keypunch operator by encouraging 
her participation in planning and control functions that 
have been previously reserved for supervisory and management 
personnel, by keeping her informed of her performance and 
how it relates to the goals of the organization, and by 
employing the motivational techniques that have been discussed, 
Hardware replacement and the incentive plan are external signs 
that a new management approach is being taken in keypunch and 
are obvious factors in increasing the marginal physical pro- 
duct of machinery and labor. But these factors are mechanical 
in their application and required in part for the production 
information and employee measurements they provide. The 
internal approach taken to provide job enrichment, to imple- 
ment meaningful employee counselling, and to accurately 
employ motivational techniques provides the largest challenge 
to data processing management, and if successful, will result 
in the most significant improvements in the keypunch 
installation. 



156 



APPENDIX A 



SYSTEM FLOWCHART 



1. Creating the System File 



Set-uo 



i 



7! 



Operator 
identificatior 
File 



y 



SL 



Computer 
Program 
No. 2 



system 
file 



VR Format 



KP Format 



Procedure 
Documentation 



2. 



Computer 
Program 



ho , 



1 



valid 
records 



V I 



l 







or 




or 



drum 



<- 



Lrrors 




or data cell 



157 



2. U pdating the System File 



for adds or changes- 



-for deletes < 



''"Procedure 
Documentation 

Header 



Set-uo 



operator 

identificatio: 
record 




± 



Compiiter 

Program 

No. 2 



system 
file 




VR Format 



KP Format 



Procedure 

Documentation 
Header 



V7 °P^li c ^}§:\. 
Computer I 
I Program 
| No. 1 , 

1 



158 



3. Incentive Reward Period Processing 



Batch 
Control 
Form 



£ 



Individual 
Production 
Report 





i 



supervisor 
Exception 
Log 



SL 



Computer 
Program 
Ko« 3 



Shift 
Production 
Report 



Backlog 



L _ 




optional 



_i 



| optional 



J 



Installation 
Production 

Report 



r 



KUACS 
Report 



159 



^. Adjusting the Proc edure Ti me Model 



\System/ 
Vile/ 

\ / 


' Batch 
Control 
Form 


— s 


( Management 

Override 

1 



























-SL 



Computer 
Program 
No. h 







Procedure Time 
Model Reoort 



Procedure 

Number 
Sequence 



i 



PTM 

Report 



Percent 
Change 
Sequence 



SL 



PTM 

Report 



160 



APPENDIX B 



RECORD FORMATS 



Set-up Record 
Field 



Column 



Document Identifier 1-3 
Month 4 -17 

Work Days 18-19 



Content 

"ZU1" 

Report month and year 

Days in pay period for 
Program #3 



blank 


20-80 


blank 


Supervisor Exception 


Log 




Field 


Column 


Content 


Document Identifier 


1-3 


"ZU2" 


Date 


4-9 


Day-month-year (ddmmyy) 


Operator Number 


10-12 


Three digit numeric 


Code 


13-14 


See Table XI 


Time 


15-17 


Time in hours 




18 


Time in tenths 


Pay Type 


19-20 


See Table XIII 


blank 


21-80 


blank 


Batch Control Form 






Field 


Column 


Content 



Document Identifier 1-3 



"ZU3" for regular production 
"ZU4" for Hotline operations 



Date 


4-9 


Procedure Number 


10-15 


Volume 


16-20 



Day-month-year (ddmmyy) 

Any alphameric 

Numeric source document count 



161 



Batch Control Form - Continued 



Field 


Co] 


.umn 


Content 


Operator Number 








Initial Process 








Keypunch 


21- 


■23 


Numeric 


Verification 


24- 


•26 


Numeric 


Corrections 








Keypunch 


27- 


•29 


Numeric 


Verification 


30- 


■32 


Numeric 



Start Time 

Initial Process 



Keypunch 


33- 


-36 


Verification 


37- 


-40 


Corrections 






Keypunch 


41- 


-44 


Verification 


45- 


-48 


Stop Time 






Initial Process 






Keypunch 


49- 


-52 


Verification 


53- 


-56 


Corrections 






Keypunch 


57- 


-60 


Verification 


61- 


-64 



Errors 65-67 

Pay Type 

Initial Process 

Keypunch 68-69 

Verification 70-71 

Corrections 

Keypunch 72-73 

Verification 74-75 

blank 76-80 



24-hour time - blank if hotline 

24-hour time - blank if hotline 

24-hour time - blank if hotline 

24-hour time - blank if hotline 



24-hour time - blank if hotline 
24-hour time - blank if hotline 

24-hour time - blank if hotline 
24-hour time - blank if hotline 

Numeric - blank if hotline 



See Table X discussion 
See Table X discussion 

See Table X discussion 
See Table X discussion 

blank 



Backlog Input (Optional- for MUACS) 



Field Column 

Document Identifier 1-3 

Date 4-9 

Procedure Number 10-15 

Code 17 

Volume 18-21 

blank 22-80 



Content 

"ZU5" 

Day-month-year (ddmmyy) 

Any alphameric 

Blank or "V" See Table XIV 
discussion 

Numeric source document count 
blank 



162 



Operator Identification Record 



Field 


Column 


Content 


Document Identifier 


1-3 


"ZU6" 


Date 


4-9 


Day-month-year (ddmmyy) 


Operator Number 


10-12 


Three digit numeric 


blank 


13-16 


blank 


Change Code 


17 


Add = blank, Delete = "D" 
Change = "C" 


Shift 


18 


1, 2 , or 3 


Pay Grade 


19-20 


GS grade 


Pay Step 


21-22 


GS shift 


Name 


23-42 


Last, first, middle initial 


blank 


43-80 


blank 


Procedure Documentat 


ion 




a. Header 






Field 


Column 


Content 



Document Identifier 1-3 



Date 


4-9 


Procedure Number 


10-15 


Suffix 


16 


Change Code 


17 


Size 


18-20 


Ratings (5) 


21-25 


Name 


26-45 


MUACS Code 


46 


blank 


47-80 


MUACS code 


56 



blank 



57-80 



"ZU7" 

Day-month-year (ddmmyy) 

Any alphameric 

A, B, ... for multiple outputs 

Add = blank, Delete - "D" , 
Change = "C" 

Number of columns in record 

Excellent = "E", Good = "G" , 
Fair = "F", or Poor = "P" 

Procedure Name (optional) 

Easy = "E", Normal - blank, 
Diff = "D" 

blank 

Easy = "E", Normal = blank, 
Difficult = "D" 

blank 



163 



7. 



b. Keypunch Format 

Standard IBM 029 Program Drum Card 

c. Verification Format 

Standard IBM 059 Program Drum Card 
Procedure Time Model 

Column Content 



Field 



Document Identifier 1-3 



Date 

Procedure Number 

MUACS Code 



Keypunch data 
Strokes 
Predetermined 

Month 3 
Month 2 
Month 1 
Use Prior 

Use Current 



4-9 
10-15 
16 



17-19 
20-23 

24-27 
28-31 
32-35 
36-39 

40-43 



"ZU8" for the system file 

"ZU9" for the management override 

Day-month-year (ddmmyy) 

Any alphameric 

Easy = "E", Normal = blank, 
Diff = "D" 



Number of strokes in procedure 
Predetermined Procedure Time 

Model 
Production time three months ago 
Production time two months ago 
Production time last month 
Procedure Time Model used 

last month 
Procedure Time Model in use 



Verification data 




Strokes 


44-46 


Predetermined 


47-50 


Month 3 


51-54 


Month 2 


55-58 


Month 1 


59-62 


Use Prior 


63-66 


Use Current 


67-70 


blank 


71-80 



Number of strokes in procedure 
Predetermined Procedure Time 

Model 
Production time three months ago 
Production time two months ago 
Production time last month 
Procedure Time Model used 

last month 
Procedure Time Model in use 

blank 



164 



COMPUTER PROGRAM NUMBER ONE 




CONTENTS 



Program Synopsis 
Input Description 
Output Description 
Sample Report Output 
COBOL Program 



165 



PROGRAM SYNOPSIS 

Program number one validates the procedure documentation 
records - the header, keypunch format, and verification 
format. Errors are printed in narrative form by procedure 
number. The listing is used by the keypunch supervisor to 
locate error records and make the appropriate corrections 
before the records are further processed. 

INPUT DESCRIPTION 

a. Set-up Record 

b. Procedure Documentation Header 

c . Keypunch Format 

d. Verification Format 

OUTPUT DESCRIPTION 

a. Procedure Documentation Error Report 



166 



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PROCEDURE DOCUMENTATION VALIDATION REPORT 

167 



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171 



COMPUTER PROGRAM NUMBER TWO 



CREATE AND UPDATE THE SYSTEM FILE 



CONTENTS 

Program Synopsis 
Input Description 
Output Description 
COBOL Program 



172 



PROGRAM SYNOPSIS 

Program number two processes all additions, changes, and 
deletions to the system file which is one file containing 
the operator identification records and a documentation 
header and time model record for each documented procedure. 

INPUT DESCRIPTION 

a. Set-up Record 

b. Operator Identification Record 

c. Procedure Documentation Header 

d. Keypunch Format (for adds and changes) 

e. Verification Format (for adds and changes) 

f. Current System File 

OUTPUT DESCRIPTION 

a. New System File 



173 



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COMPUTER PROGRAM NUMBER THREE 



PRODUCTION EFFECTIVENESS AND 
INCENTIVE REWARD CALCULATIONS 



CONTENTS 

Program Synopsis 
Input Description 
Output Description 
Sample Report Output 
COBOL Program 



181 



PROGRAM SYNOPSIS 

Program number three processes records of actual 
production each pay period. The output consists of a 
report series consisting of data on production efficiency, 
incentive hours earned, hours of v/ork completed by job 
order for payroll reporting, and optional MUACS data. 

INPUT DESCRIPTION 

a. Set-up Record 

b. Batch Control Form 

c. Supervisor Exception Log 

d. Backlog Record (optional) 

e. Current System File 

OUTPUT DESCRIPTION 

a. Individual Production Report 

b. Shift Production Report 

c. Installation Production Report 

d. MUACS Report (optional) 



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202 



COMPUTER PROGRAM NUMBER FOUR 



UPDATING THE PROCEDURE TIME MODEL 



CONTENTS 



Program Synopsis 
Input Description 
Output Description 
Sample Report Output 
COBOL Program 



203 



PROGRAM SYNOPSIS 

Program number four updates the Procedure Time Model 
based on reported production and management override records 

INPUT DESCRIPTION 

a. Batch Control Form 

b. Management Override 

c. Current System File 

OUTPUT DESCRIPTION 

a. New System File 

b. Procedure Time Model Report 



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211 



BIBLIOGRAPHY 



1. Alrich, J.C., "Keypunch Replacement Equipment," 

DATAMATION , June 1970, p. 79-89. 

2. Arvey, R. D. and Dunnette , M. D., "Task Performance 

as a Function of Perceived Effort-Performance and 
Performance-Reward Contigencies , " University of 
Minnes o ta C enter for the Study of Organi za tional 
Performance and Human Effectiveness, Report 4003 , 
September 197 0. 

3. Broadbent, D. E., Perception and Communica tion, 

Pergamon, 1958. 

4 . Business Week , "Job Monotoney Becomes Critical , " 

September 9, 1972, p. 108. 

5. Business Week , "Management Itself Holds the Key," 

September 9, 1972, p. 142-149. 

6. Caro, J. M. , Incentive Plans as Civilian Emp l oyee 

Motivational Devices in the Department of the Navy , 
MBA Thesis, George Washington University, Washington, 
D. C. , June 1971. 

7. Cary, R. F., "A History of Keyboard Data Entry 

Equipment," DATAMATION , June 1970, p. 73-76. 

8. Cutting, R. A., M. D., "Fatigue," The American Peoples 

Encyclopedia , Grolier, Inc., 1963, p. 8-349. 

9. EDP ANALYZER , "Improvements in Data Entry, Part 1," 

Vol. 9, No. 9, September 1971. 

10. EDP ANALYZER , "Improvements in Data Entry, Part 2," 

Vol. 9, No. 10, October 1971. 

11. English, H. B., and English, C. A., A. Comprehensive 

Dictionary of Psychological and Psychoanalytical 
Terms , McKay, 1958. 

12. Federal Personnel Manual , "Incentives," Chapter 451, 

U. S. Government. 

13. Forward, J. R. , "Group Achievement Motivation and 

Individual Motives to Achieve Success and to Avoid 
Failure," University of Michigan, Report AF 49(638) 1630 , 
June 1969. 



212 



15. Greenblatt, S., "Delete Delays and Dollars with Direct 

Data Entry," INFOSYSTEMS , September 1972, p. 20-25. 

16. Halcomb, C. G., McFarland, B. P., and Denny, N. R. , 

"Monitoring Performance with a Time-Shared Memory 
Task," Texas Tech University, Report AD72I918 , 
April 1971. 

17. Herzburg, F. , Mausner, B., and Snyderman, B., The 

Motiva tion to Work , Wiley, 1959. 

18. Hollander, E. P., "Validity of Peer Nomination in 

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1965, p. 434-438. 

19. Kahn, R. L., "Productivity and Job Satisfaction," 

Personnel Psychology , Vol. 13, Autumn I960, p. 27 5-287. 

20. King, A. S., Managerial Relations with Disadvantaged 

Work Groups: Supervisory Expectations of the Under - 
privileged Worker , Ph.D. Thesis, Texas Tech University, 
May 197 0. 

21. Kittock, K. E., LCDR, SC , USN, "Evaluation of Computer 

Controlled Source Data Entry Equipment," N aval Supply 
Center, Newport, Rhode Island, Final Report , April 1971 

22. Landon, J. R. , "Data Preparation at Blue Cross," 

DATAMATION , June 1970, p. 91-92. 

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Standards and Procedures," Section 10, Chapter 1, 
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Inc., 1958. 



213 



29. Opsahl, R. L. and Dunnette , M. D. f "The Role of 

Financial Compensation in Industrial Motivation," 
Psychological Bulletin , Vol 66, No. 2, 1966, p. 94-118. 

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Irwin, Inc., 1971. 

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32. Porter, L. W. , "The Use of Rewards in Motivating Marginal 

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Attitudes and Performance , Irwin-Dorsey , Limited , 1968. 

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William C. Brown Company, 1966. 

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Personnel , Vol 37, July-August 1960, p. 20-27. 

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37. Stender, R. C, "The Future Role of Keyboards in Data 

Entry," DATAMATION , June 1970, p. 60-72. 

38. Surface, W. D. , The Effect of Music on the Metabolic 

Rate of Workers , M. S. Thesis, Purdue University, 
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Hill, 1963. 

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Behavior," Bucknell University Report AD697001 , 
October, 1969. 

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214 



44. Wassenaar, D. J. and Oestreich, H. H., The Hawthorne 

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45. Zander, A. F., "Group Aspirations and the Desire for 

Group Achievement," University of Michigan, Report 
AF 49(638)-1630, March 1970. 



215 



INITIAL DISTRIBUTION LIST 



No. Copies 



Asst Professor Gerald L. Musgrave, Code 55 2 
Department of Operations Research/ 

Administrative Sciences 
Naval Postgraduate School 
Monterey, California 93940 

LCDR Lawrence L. Danforth, SC , USN 1 

8 Mervine 

Monterey, California 93940 

CDR John M. Briggs, SC , USN 2 

Director, Data Processing Department, Code 61 
Naval Supply Center 
Long Beach, California 90801 

Defense Documentation Center 2 

Cameron Station 
Alexandria, Virginia 22314 

Library, Code 0212 2 

Naval Postgraduate School 
Monterey, California 93940 

Commanding Officer 1 

Naval Supply Center 

Long Beach, California 90801 

Director; Land Use, Recreation, and Tourism 1 

Stanford Research Institute 

333 Ravenswood Avenue 

Menlo Park, California 94025 

Mr. Bart A. Steib 1 

Naval Supply Systems Command, Code NSUP 6 3 0CM3 
Washington, D. C. 20390 



216 



UNCLASSIFIED 



Security Clas sifica tion 

■mi. 1 1 !■ i !■■*■■ ii 



DOCUMENT CONTROL DATA -R&D 

(Security elm silic ation of title, body of abstract end indexing annotation musf be entered when the overall report Is classified) 



I Originating ACTIVITY (Corporate author) 

Naval Postgraduate School ' 
Monterey, California 9394 



2*. REPORT SECURITY CLASSIFICATION 



Unclassified 



26. GROUP 



3 REPOR T TITLE 



A Design and Implementation Plan for a Keypunch Unit 
Management System Incorporating a Variable Incentive Wage Rate Based 
on Individual Productivity 



4 DESCRIPTIVE NOTES (Type of report and. inclusive dates) 

Master's Thesis; December, 1972 



5- au THORlSl (F itst name, middle Initial, laat name) 

Lawrence L. Danforth 



6- REPORT DATE 



December, 197 2 



7e. TOTAL NO. OF PAGES 



218 



7b. NO. OF REFS 



45 



la. CONTRACT OR GRANT NO. 



b. PROJEC T NO. 



9a. ORIGINATOR'S REPORT NUMBER(S1 



9b. OTHER REPORT NOISI (Any other nutnbere that may be aeafgtied 
thla report) 



10. DISTRIBUTION STATEMENT 



Approved for public release; distribution unlimited. 



II. SUPPLEMENTARY NOTES 



12. SPONSORING MILI TARY ACTIVITY 



Naval Postgraduate School 
Monterey, California 93940 



13. ABSTR AC T 



This thesis offers a method to reduce keypunch costs by increasing 
the marginal physical product of keypunch labor and machinery. The 
marginal physical product of labor is increased through: (1) job 
enrichment, meaningful employee counselling, and motivational 
techniques, (2) an incentive plan that rewards productive employees 
with higher wages or more leisure hours that is based on a 
Procedure Time Model which is mathematically predetermined, but 
adjusted based on actual production, and (3) workspace environmental 
improvements designed to prevent working conditions from inhibiting 
the motivational and technological changes. The marginal physical 
product of machinery is increased through matching workload 
requirements to various hardware configurations with detailed 
emphasis on keydisk hardware specifications and operational experiences 
The thesis includes the procedures and computer programs necessary 
for implementation and the production reports and attitude question- 
naires necessary to measure the degree to which implementation has 
been successful. 



DD , F °ol M ..1473 (PAGE " 



FORM 

1 NOV 

S/N 0101 -807-661 1 



217 



UNCLASSIFIED 



Security Classification 



i- 3 140 8 / 
\ 



UNCT.AR.qTFTFn 



Security Classification 



KEY WO WO» 



INCENTIVES 

MOTIVATION 

PERSONNEL MANAGEMENT 

PARTICIPATIVE MANAGEMENT 

SALARY ADMINISTRATION 

DATA PROCESSING - PERSONNEL 

PERSONNEL -DATA PROCESSING 



ROLE WT 



HOLE WT 



FORM 

I MOV 



.J473 < BACK > 



S/N 0101-807-6921 



218 



UNCLASSIFIED 



Security Classification 



A- 3 t 409 



0EC73 
9 2 0CT7S 



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Danforth 

A design and implemen- 
tation plan for a key- 
punch unit management 
system incorporating a 
variable incentive wage 
rate based on individual 
productivity. 



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Danforth 

A design and implemen- 
tation plan for a key- 
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system incorporating a 
variable incentive wage 
rate based on individual 
producti vi ty. 



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